Sellers may offer services or products to clients with the agreement that payment will be made at intervals on specific dates. Even though some clients might be careful to abide by these agreements, others might forget, which could result in an overdue payment. Such instances require the seller to take action to retrieve the payment, which includes writing a reminder email.
A seller’s email to a customer reminding them to make a payment is known as an overdue invoice. It informs the client that a payment has yet to be made. The seller may also send the payment reminder in a letter or make a phone call to the client. Most independent contractors or freelancers prefer emails, as they are quicker.
It is also referred to as the following:
- Outstanding payment letter
- Debt recovery letter
- Overdue invoice letter
Pro tip
It is not uncommon for clients to forget about an invoice or find themselves overwhelmed by the backlog, which can slow down the rate of pending payments to sellers. With this in mind, the first step sellers must take upon realizing an overdue payment is to communicate with the client by making a friendly phone call, writing a letter, or sending an email.
Editable Templates
What to Include?
The seller should clearly understand what to include in such an email. Knowing the information contained in it will help the seller write it appropriately. It will also ensure that adequate information is conveyed to the client.
It should contain the following information:
Your company’s name and address
It should outline the seller’s company name and address. If a seller writes an email, then these details should be indicated at the bottom of the email; however, if a letter is written, then the seller’s details should be mentioned at the top of the page.
Recipient’s name and address
The recipient’s details must then be indicated. The details include the name and address of the recipient. They should be included at the top of this email.
Date
The full date of writing should also be provided. It should contain the day, month, and year.
Account reference number
The account reference number should also be indicated in it. It tells the client which accounts the email is highlighting.
Your reason for contacting them
The seller should clearly outline why the client is being contacted. However, an offensive or rude statement as the subject of the letter can make customers defensive or embarrassed about overdue payments, so the subject line should be polite.
Invoice and payment details
It should contain specific details about the invoice and the payment. Clients can use these details to check their records and confirm that payment is overdue.
The details should include the following information:
- Invoice number: The invoice number is the unique sequential code assigned to the client’s invoice. It, therefore, helps both the client and seller when referring to payments.
- The amount owed: The seller should indicate the specific amount owed in the email. In addition, the amount already paid and the outstanding amount may also be shown. These details provide the client with a complete picture of payment transitions with the seller.
- Original payment due date: The original payment due date that the client and seller had agreed on should be fully indicated in it. The seller can also provide additional information by indicating when the initial payment was made. The original payment due date helps remind the client when the payment should have been made and clearly shows that the payment is overdue.
- A brief explanation of why no payment has been received: The seller should briefly explain that no payment has been received. If the payment was meant to be made by a particular department of the client’s business, then the department’s name should be included in the explanation. The seller should maintain a friendly tone while indicating these details.
- Reminders of previous letters: It should also remind the client of previous letters that the seller sent to them. The seller should indicate the date on which the letter was sent.
- Instructions for payment: The seller should indicate instructions for payments that are pending. The instructions can be included as a link in the email. The link helps keep the email brief.
- Payment options: The client’s available payment options should be mentioned. By providing a comprehensive list of available options, clients can choose how to make the outstanding payment.
Specify late penalties
Specific late payment penalties, as well as outstanding amounts, should be specified in it. The late penalties may be a practical percentage of the amount or a set amount. In addition, the seller should indicate that these late penalties are under the terms of the agreement made with the client and any current government legislation.
Offer a payment plan
The seller can offer the client a payment plan if previous attempts to demand payment have been unsuccessful. Such an email should clearly express a willingness to work on the payment plan together with the client. The payment plan may encourage the client to pay the outstanding amount.
Enlist help
If payment is not made, the seller may warn that the debt will likely be turned over to a collection agency or lawyer. The statement indicating that an attorney or collection agency will contact the client if no effort is made will help show the last warning before the account is handed over. In addition, indicating a willingness to turn over the payment can motivate the client to respond to the overdue invoice letter or email or make the payment.
Offer to resend the invoice
The seller should also offer to resend the invoice in case the client misplaced the original copy. The seller may attach the invoice to the email. The attachment will save the client’s time and effort. The attached invoice should be sent in the form of a PDF to ease the client’s ability to view it.
Add your availability to answer questions
The email’s final section should end with an offer to discuss the invoice or answer any questions the client may have. The statement should express a willingness to speak about any issues. The seller should also indicate that a follow-up phone call will be made later.
When Should I Send an Overdue Invoice Letter?
If products or services have been provided and an invoice has been issued, but no payment has been made by the client even after the agreed-upon period, then an overdue invoice letter should be sent. It can also be sent if the seller’s approach of calling or sending an email to the client does not work. The overdue invoice letter helps formalize the demand. The seller should have a copy of all formal correspondence with the client, along with an up-to-date address of the client’s residence or office.
Payment Reminder Email Template
Subject: Payment Reminder for Invoice #[Invoice Number]
Dear [Recipient’s Name or Company Name],
I hope this message finds you well. I am writing to remind you of the outstanding payment for invoice #[Invoice Number], issued on [Date], for [Description of Goods/Services]. As per our terms, the payment was due on [Due Date], and as of today, it remains outstanding.
We understand that oversights happen and want to ensure this is not an inconvenience for you. Here are the details for your reference:
- Invoice Number: [Invoice Number]
- Issue Date: [Date]
- Due Date: [Due Date]
- Amount Due: [Amount]
To facilitate a smooth transaction, you can make the payment through [Payment Methods, e.g., bank transfer, online payment portal] using the following details: [Payment Details].
If you have already made the payment, please disregard this email or let us know, and we apologize for any inconvenience this may have caused. If there are any issues or concerns regarding this payment, or if you anticipate a delay in making the payment, please contact us at [Your Contact Information] to discuss the matter further. We are more than willing to work with you to find a suitable solution.
Your prompt attention to this matter is greatly appreciated. We value your continued business and look forward to resolving this outstanding payment promptly.
Thank you for your cooperation.
Best regards,
[Your Name]
[Your Job Title]
[Your Company Name]
[Your Contact Information]
Overdue Invoice Letter Samples
1-15 days past due
Subject: Friendly Payment Reminder for Invoice #4567
Dear Alex Thompson,
I hope this email finds you well and thriving. I’m reaching out to gently remind you about the outstanding payment for invoice #4567, issued on July 20, 20XX, for the custom logo design services we provided last month. As per our records, the payment was due on August 10, 20XX, which as of today, is 5 days overdue.
We completely understand how hectic schedules can be and that sometimes things might slip through. To ensure everything is on track, here’s a brief overview of the invoice details for your records:
Invoice Number: 4567
Issue Date: July 20, 20XX
Due Date: August 10, 20XX
Amount Due: $750
For your convenience, payments can be made via our online payment portal at www.creativedesignsolutions.com/payments, or if you prefer, through a bank transfer to the following account details:
- Bank Name: First National Creative Bank
- Account Holder: Creative Design Solutions Inc.
- Account Number: 123456789
- Routing Number: 987654321
Should another payment method be more suitable for you, please feel free to inform me, and we will accommodate your needs.
If by chance you have already settled this invoice, please accept our sincerest apologies for this reminder. We would appreciate it if you could notify us to ensure our records are up to date. Conversely, if there are any issues with the services provided or the invoice details, I am more than ready to assist in resolving those concerns promptly.
Your immediate attention to this matter would be greatly appreciated. Should there be any anticipated delays in payment or if you have any other concerns, please don’t hesitate to get in touch with me directly at jordan.smith@creativedesignsolutions.com or (555) 345-6789. We are here to support you and ensure a smooth resolution to this matter.
Thank you very much for your cooperation and understanding. We deeply value your business and are eager to continue supporting your branding efforts.
Warmest regards,
Jordan Smith
Accounts Receivable
Creative Design Solutions
jordan.smith@creativedesignsolutions.com
(555) 345-6789
30-60 days past due
Subject: Urgent: Overdue Payment Notice for Invoice #7890 – 45 Days Past Due
Dear Cameron Lee,
I hope this message finds you well. I am writing to you on behalf of BrightPath Tech Solutions regarding the overdue payment for invoice #7890, which was issued on June 1, 20XX, for the IT support services provided in May. As of today, this invoice is 45 days past its due date of July 1, 20XX.
We value the business relationship we have built with you and understand that sometimes unforeseen circumstances can affect timely payments. However, as we have not received any communication regarding this delay, we are concerned about the status of this payment.
Here are the details of the overdue invoice for your reference:
- Invoice Number: 7890
- Issue Date: June 1, 20XX
- Due Date: July 1, 20XX
- Amount Due: $1,200
To resolve this matter as quickly as possible, we kindly request that the payment be made immediately. You can make the payment through our online portal at www.brightpathtechsolutions.com/pay or via bank transfer using the following account information:
- Bank Name: Global Tech Bank
- Account Holder: BrightPath Tech Solutions
- Account Number: 9876543210
- Routing Number: 012345678
If there are any discrepancies with this invoice or if you are experiencing difficulties that are preventing payment, please contact us immediately at accounts@brightpathtechsolutions.com or call us at (555) 678-9012. We are more than willing to discuss any issues and find a mutually agreeable solution.
Please note, if we do not receive payment or hear from you regarding this matter within the next 7 days, we may need to consider further actions to recover the outstanding amount. We hope to avoid such measures and kindly urge you to get in touch with us to discuss your payment options.
Thank you for your prompt attention to this matter. We are eager to resolve this issue amicably and continue our successful partnership.
Best regards,
Morgan Hayes
Accounts Receivable Manager
BrightPath Tech Solutions
accounts@brightpathtechsolutions.com
(555) 678-9012
90+ days past due
Subject: Final Notice: Immediate Action Required for Invoice #4321 – Over 90 Days Overdue
Dear Taylor Morgan,
I hope this message finds you in good health. As the Financial Controller at Apex Innovations, I must address a serious concern that has come to my attention. Despite previous reminders, we have yet to receive payment or a response regarding the significantly overdue invoice #4321, dated March 15, 20XX, for the consulting services provided in February 2024. This invoice is now more than 90 days overdue, with a due date of April 15, 20XX.
We have made multiple attempts to contact you to resolve this matter amicably, understanding that unforeseen circumstances can sometimes delay payments. However, the lack of response and payment has left us in a difficult position.
Invoice Details for Your Reference:
- Invoice Number: 4321
- Issue Date: March 15, 20XX
- Due Date: April 15, 20XX
- Amount Due: $2,500
To avoid further escalation of this situation, we urgently request your immediate attention to settle the outstanding amount. Payment can be made through our online payment system at www.apexinnovations.com/payment or via bank transfer to:
- Bank Name: CommerceTech Bank
- Account Holder: Apex Innovations
- Account Number: 00123456789
- Routing Number: 010101010
If there are any issues or concerns preventing you from settling this invoice, it is imperative that you contact us immediately at finance@apexinnovations.com or (555) 123-4567 to discuss potential resolutions. We are willing to consider payment arrangements if necessary, but we must be informed of your situation to assist you effectively.
Please be advised, that if we do not receive payment or hear from you within the next 5 business days, we will have no choice but to initiate collection proceedings. This action is not our preferred course, and we strongly urge you to take immediate steps to prevent any further consequences.
We value our business relationship and have always appreciated your promptness in the past. We hope to resolve this matter swiftly and continue our partnership on positive terms.
Thank you for your immediate attention to this critical issue.
Sincerely,
Jordan Patterson
Financial Controller
Apex Innovations
finance@apexinnovations.com
(555) 123-4567
Analysis
These three sample letters effectively address varying degrees of overdue payments while maintaining professionalism and clarity.
In the first letter (1-15 days past due), the tone is friendly and understanding, reminding the recipient of the overdue payment without being confrontational. The letter provides clear details of the invoice and payment options, offering assistance if needed. It acknowledges the possibility of oversight and offers an apology if the payment has already been made, ensuring a positive customer experience.
The second letter (30-60 days past due) takes a slightly firmer approach, emphasizing the urgency of the situation while still maintaining a professional tone. It reiterates the invoice details and provides payment instructions, while also expressing concern about the lack of communication regarding the delay. The letter offers assistance in resolving any issues and encourages immediate action to prevent further consequences.
In the final letter (90+ days past due), the tone becomes more assertive as the situation escalates. The letter clearly communicates the seriousness of the overdue payment, highlighting previous attempts to contact the recipient and the potential consequences of continued non-payment. It emphasizes the need for immediate action and offers options for resolving the issue, including payment arrangements if necessary.
Overall, these letters effectively address overdue payments with a progressively assertive tone, while still maintaining professionalism and offering assistance to resolve the issue amicably.
Professional Tips
While writing this email, the seller aims to both express the need for the payment to be made and maintain the relationship with the client.
Various tips can help the seller attain both of these objectives, as discussed below:
Follow up at the right time
If a client is known to make late payments, this email should be sent immediately after the due date. However, if the client usually makes timely payments or is new, it should be sent after one or two weeks. Then, the seller should follow up again 30, 60, or 90 days after the due date.
Adapt the language
The language used should be adapted both to the situation and to when the payment remainder is written.
EXAMPLE
An email sent one to fifteen days after the due date should be polite and friendly to serve as a gentle reminder while maintaining a relationship with the client.
A letter or email written thirty to sixty days after the due date should be firm and professional to convey the situation’s urgency. Whereas, a reminder sent after ninety days should inform the client that the debt runs the risk of being turned over to a collection agency as, at this point, payment is less likely to be received.
Be polite
It should convey a polite tone, as it may factor into whether or not the seller gets paid. Phrases that show humility and appreciation towards the client have proven to increase the seller’s chances of getting paid and improve the business’s image. These phrases include ‘please’ and ‘thank you.’
Remind your client of your late payment policies
If the payment is more than a week overdue, the email should make note of the late payment policies in the contract between the seller and the client. In addition, interest rates can motivate clients to make timely payments.
Provide online payment options
The seller should incorporate online payment options in the email. These options are faster and easier to use for clients. They help reduce delayed payments
Make it easy for your client
The client should be able to easily access the fundamental details about the past-due payment using the information provided in the emails. Clearly outlining details such as the original due date and the amount owed increases the seller’s chances of getting paid.
Effective Practices to Prevent Late Payments
The seller should consider a few practices to avoid late payments. By following these procedures, the seller will avoid wasting time and resources requesting payment. They will also help facilitate good business practices by the seller.
The following should be practiced to prevent late payments:
Check your customers’ credit history
The seller can determine whether the buyer will make payments on time by conducting a credit check. It also helps reveal if the client is running a reputable business or company.
Implement clear payment terms
Implementing clear payment terms helps the client understand when payment is due. It also ensures that the client and the seller understand their rights and obligations from the beginning of the work.
Include late payment penalties
The seller can deter overdue payments by outlining late payment penalties in the agreement with the client. Penalties for late payments could include interest or fees.
Frequently Asked Questions
An unpaid invoice can be pursued for up to six years, according to the Limitation Act of 1980. However, this can only be made possible if a contract has been established between the creditor and the debtor. If a contract is not established, collecting the debt may not be possible. To prevent the debtor from disputing or denying the debt, the creditor should also have all necessary documentation on hand.
If the account is 90 days overdue, then the collection agency may be involved, as payment at this point is unlikely to be made. However, the seller should also check the terms of the contract and state laws to determine when to involve a collection agency.
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