How to Send an Overdue Payment Reminder

1. How to Request Payment From a Customer 
2. When to Request Payment for An Overdue Invoice
3. How to Send an Overdue Invoice Reminder
4. The Case for Automation 
5. What to Include in an Unpaid Invoice Letter or Email
6. Bringing it All Together – an Email Template
7. What to Do if the Customer Doesn’t Respond to Your Overdue Invoice Reminder?
8. Actions You Can Take If Payment Reminders Don’t Work
9. Sending and Tracking Invoices with Joblogic

It’s not uncommon for clients to be late with payments, but for businesses, this can bring about chaos. Intermittent payments can prevent you from paying employee salaries, suppliers, rent and utility bills on time, leading to profound financial implications and even bankruptcy.

To prevent this from happening, it may be a good idea to send an overdue reminder for customers who are behind. Whether it’d be an unpaid invoice letter, email or phone call, it’s essential to let them know that you are aware of the situation.

However, there are nuances to how you should go about this. What might work well with one customer may not be as effective for another; or even worsen the situation. Remember, your clients are your business’s most important asset, so being too pushy or harsh could be counterproductive.

Below we’ll go through the best ways to send an overdue account reminder for customers and what to do if they’ve fallen on deaf ears:

How to Request Payment From a Customer 

You’ve broken down the costs, provided your client with an accurate list of what was agreed to be delivered, and added the appropriate markup. Your customer has approved your price quote and work can begin.

After job completion, you send an invoice for services rendered, essentially an official bill that states all the work you did, along with any costs involved (if applicable).

At this point, some clients will be more than happy to pay you. If they are, great! You’ve earned your money which can be reinvested into the business. However, others will put off payments as long as possible, perhaps waiting until an “appropriate” time after payment is expected. This might be when their taxes are finalised or when they receive the next salary payment.

By issuing an invoice, you’ve established an official record of the work you’ve done, and that’s your evidence should things go sour.

When to Request Payment for An Overdue Invoice

Most businesses typically receive payment for an invoice under 30 days, especially when online invoicing is used. This is because paying online is easy, fast and secure for most people.

However, the timeframe of which invoices should be paid is entirely up to the company. Required invoice payments can range from 14 days, 30 days, all the way up to 90 days, depending on the business agreement.

When an invoice has gone over the expected period (usually 30 days), there’s a chance that you will not be paid at all, or just partially. If this happens, it’s time to send your client a business letter for outstanding payment to ask for the money owed.

How to Send an Overdue Invoice Reminder

There are many ways to send invoice reminders, but the most popular methods are by a letter or email. Whether you’re writing an unpaid invoice letter, email, or even a text message, your tone must remain appropriate and professional.

Invoices for overdue payments should never be sent as angry letters because they achieve nothing positive. In fact, they are more likely to make your company look bad and can even make it harder for you to get paid in the future.

The Case for Automation 

With the help of software, you can send invoice reminders automatically. This is advantageous if your business sends hundreds or even thousands of invoices reminders every month. In this case, manually doing so would become incredibly tedious and time-consuming.

Automating your overdue invoice reminder email process ensures that no client slips through the net as overdue payments are tracked automatically for you. It also simplifies the process and guarantees your clients receive their outstanding invoice reminders on time.

A word of warning, however: automated email reminders can sometimes backfire if a client feels harassed or threatened. It’s crucial, therefore, not to bombard your clients with too many emails, remembering that you need them more than they need you.

However, if your company only services a handful of clients, sending an email reminder might not be necessary. Instead, you can write a business letter for outstanding payment and send it by post. This adds a personal touch to your business and shows that you’re willing to go the extra mile.

What to Include in an Unpaid Invoice Letter or Email

Invoice reminder letters and emails should be short, polite and to the point. Your tone is important because it shows your client how serious you are about getting paid for your service.

If you’re not sure of what to write for you overdue invoice reminder email, then here are some guidelines that you might find helpful:

Ensure Your Subject Line is Straight to the Point

Your subject line should be specific to the invoice that has been paid late, helping to catch your client’s attention. It should include the invoice number and a clear statement that they’re late on payment.

For example:

“Follow up on Invoice #123 – (Company Name)”

If you include words like ”reminder” or ”payment reminder” in your subject line, it might come across as too pushy for some clients, especially if it’s their first time receiving one of these emails/letters.

However, if your payment overdue letter to the client has been ignored, you can be more stern in your next email and include the words mentioned above. Remember there are no hard and fast rules for this, but the last thing you want to do is get off on the wrong foot with your client.

Attach The Original Invoice

You might think that attaching the original invoice is pretty pointless, but it can be a great way to remind clients of what they owe you.

Attach the original invoice in your overdue invoice reminder email so that they have everything in one place. This saves your clients from going through their previous emails/files, wasting time for both parties.

Lastly, ensure that your attachment is a PDF or JPG file so that it’s print-ready and easy to open.

Begin Your Email or Letter with a Positive Statement

You might not be able to avoid that your client has been paid late, but you can still start on a positive note.

For example:

“Hi (Client’s Name),

I hope you’re having a good month so far.

We have just sent out your payment for invoice #123, which was due on the 25th of May”.

A friendly and positive tone will also make them more likely to respond similarly, and they might even thank you for the communication.

Furthermore, don’t be afraid to show empathy in your letter or email because it will make you look more professional. For example: “We understand that things can get pretty hectic sometimes”. These words are a great way of showing your client that late payments are not entirely their fault.

Ensure Payment Details are Clear and Concise

It can be easy to go off on a tangent in your letter or email, but you must remain concise and get straight down to business.

Stick with a simple statement of how much they owe you for their invoice(s) – including any late payment fees – before giving them a deadline for when they should send you back the money.

For example: 

“The total amount that you owe is £X.XX, and this must be paid by the 30th of June”.

This statement will also help to reassure your client that there’s no hidden fees or charges associated with their late payment(s). However, if you are willing to enforce fees on late payments, make sure to tell your client right from the start (preferably on the original invoice).

Include the Payment Methods You Accept

Your clients are busy people, and the last thing they need is hunting through their files or emails to find out how they should pay you back. Instead, simply provide them with your company’s preferred payment methods.

It could be by direct bank transfer or PayPal – whichever you like as a business owner. Not only will this information save your clients time, but it can prevent any further confusion.

For example, you could include this in your email:

“We accept the following payments:

• Cash
• Cheque
• Direct Bank Transfer
• PayPal”

You can also include a link to your website’s payment page – if you have one. This will help them find the quickest and most convenient way of paying you back without any hassle.

Bringing it All Together – an Email Template

Here is a complete email template for you to use:

“Hi (Client’s Name),

I hope you’re having a good month so far.

We have just sent out your payment for invoice #123, which was due on the 25th of May. We understand that things can get pretty hectic sometimes, which is why we’re sending this friendly reminder.

The total amount that you owe us for invoice #123 is £X.XX, which needs to be paid by the 30th of June. We accept the following payments:

• Cash
• Cheque
• Direct Bank Transfer
• Paypal

You can also find our payment terms here: (Link to your website’s payment page).

We look forward to hearing from you soon. Thank you for the business, and we hope that everything is going well with you.

Kind regards,

[Your Name]

[Business Phone Number]

[Business Email]”

What to Do if the Customer Doesn’t Respond to Your Overdue Invoice Reminder?

If your client has deliberately ignored your overdue reminder(s), it might be time to take a more serious approach. In this situation, you can send another late invoice email or letter in a more direct tone or choose to take other forms of action.

Here are a few things you’ll want to mention in your follow up letter/email:

Offer a Payment Plan

If your client has disclosed they’re not in a position to pay your invoice immediately, then offer them a payment plan convenient for both of you. This might mean dividing the invoice into smaller monthly payments that they can afford; or something similar.

Let Them Know That Your Company Will Take Further Action

In some cases, your client might be too late with their payment, and you’ll need to take further action. At this point, you must ensure they understand this and what it means for the client.

For example:

“Dear (Client’s Name),

We have sent out payment reminders for your overdue account on three occasions, but this has fallen upon deaf ears each time. Please note that with our policy of charging late fees after the second reminder, your account is now £X overdue.

Failing to pay your invoice by the 30th of this month will result in your account being handed over to our debt collection agency. This is the last resort, and we hope that you will pay us as soon as possible, so we don’t have to take this drastic step.”

This shows them how serious your company is about collecting outstanding payments, which might motivate them to pay the invoice quickly.

Actions You Can Take If Payment Reminders Don’t Work

If all the reminder emails you’ve sent haven’t worked, then there are some other actions you can take:

Debt collection agency: This service specialises in chasing money that is owed to you (generally after 90 days). In this case, you will be charged 25% to 50% of the amount that’s owed.

Factoring services: Similar to a collection agency, a factoring service will take on your debt and work to recover it for you. The main difference being they will run a credit check on the debtor to determine their creditworthiness.

File a Lawsuit: If your client owes you considerable sums of money, it may be cost-effective to hire an attorney to file a lawsuit for your unpaid invoice. Always consider the cost of court fees and other associated legal costs before taking this route.

Small Claims Court: While a tedious process, filing a complaint and case against your client in a small claims court for non-payment is a good way to get your money back. In most cases, you will not require the services of a solicitor.

Sending and Tracking Invoices with Joblogic

Today, many small businesses are using Joblogic to send and track invoices. This cloud-based invoice solution lets you create customised, professional invoices in minutes.

Create your own outstanding invoice template that reflects your brand with your choice of company logo, colour scheme, fonts and more. Customised invoices offer a higher level of professionalism and show your clients that you take their business seriously.

With Joblogic’s software, your engineers can modify and send invoices from anywhere, which saves them time and lets your company operate more efficiently. If your invoicing process is manual, it’s time to start using Joblogic.