How to Write Letter for Reminder for Payment to Reduce Outstanding Dues?
Imagine a situation where a client stops replying to your emails after being in constant touch with you earlier. They owe you a few hundred pounds for buying products from you, but they are not ready to release the payment for the same.
Unfortunately, all businesses face such scenarios often where clients start ghosting them when an invoice becomes due. Thus, you may need to send a well-written letter for reminder for payment to them, urging them to pay.
Piled-up payments are a grave problem in the UK. And you must have an overdue invoice reminder template handy to deal with such clients. 82% of SMEs currently have huge outstanding dues, and every firm has £62,957 stuck in debt. Also, 17% of businesses scrapped their due invoices suspecting that their debtors have no money to pay them.
Businesses should curate several debt recovery strategies to keep their cash flow running smoothly. One of these strategies is to send a strong letter for outstanding payment to clients now and then. It helps you remind them of their bills and give them the push they need to honour their dues.
Let us focus on how to write a payment reminder letter in this blog with some standard tips to help you. We have also included some templates you can refer to for drafting such messages!
How Does Writing a Past Due Invoice Letter Make a Difference?
Before you consider sending a letter to clients, you may have already tried the following methods:
- Calling the client several times to get an update
- Texting them, asking when they intend to complete the payment
- Getting their account representatives to contact them informally
- Emailing them the invoice a few times
Sending a formal past due payment letter helps create urgency. It tells the clients that this is their last chance to pay before they take legal action. Most customers don’t want to pay additional interest or legal costs. Thus, they might finally give in and release your payment.
In short, an overdue payment letter is your best shot at getting paid. Moreover, it sets a deadline for clients to pay, so you don’t need to wait months to see if your letter works.
Remember, these steps are for those debtors who constantly make excuses and ghost you to save themselves from making a payment. However, some clients genuinely might have forgotten to pay. Hence, sending a polite reminder of overdue payment is all you need to do to get paid within a few hours or days.
How to Write a Letter for Overdue Payment?
Always use a professional format to write a letter to clients. Also, don’t forget to include all the necessary details, like
- Your company’s name and address
- Your name (the representative who was in touch with the client since the beginning of your association)
- The client’s company name and concerned person’s name
- The date you send out your letter for reminder for payment
- Invoice number and date
- Payment terms
- Days overdue
- Payment options
- Interest (if applicable)
- Your contact information
And here is how you format your payment reminder letter:
Letterhead
It is advisable to print your letters on your formal letterhead to make them look professional and firm. Ensure that it consists of your brand logo, company name, and contact information to increase impact.
Also, letterheads help you avoid writing a return address before you start writing your letter.
Date
Write the date when you send the payment reminder letter either via email or mail, not the date when you draft it.
Delivery Address
Insert the correct mailing address with the recipient’s full name. You don’t want the postal workers to return your letter to you because of minor mistakes. Thus, it makes sense to use an address verification API like PostGrid to verify that your addresses are precise and deliverable.
Subject
Try to include the term ‘Reminder of Overdue Payment’ in the subject line. It boosts the seriousness of your message and gives it a more formal look.
Salutation
Start your past due invoice letter with a salutation, like ‘Dear Mr./Ms. ABC.’ Always use the person’s preferred name in the salutation.
Introductory Paragraph
Mention all the crucial details in your first paragraph, like the amount they owe you, invoice date, number of overdue days, etc. Tell them that you need to bring this information to their immediate attention.
Elaborate On Other Things
You can talk about other aspects of the invoice in the second paragraph of your overdue payment letter. Repeat the payment terms mentioned in the bill and inform them of the methods they can use to pay you.
Issue a Gentle Warning
If you only need to send a reminder of overdue payment, it is best to skip this section. But, you can warn your clients that you will take legal action if they don’t reply to your past letters continuously.
Closing
Close your letter with a thank you and express that you are waiting for their reply.
Enclosures
Attach a copy of the bill with your letter for the reminder for payment for your client’s reference.
Things to Remember While Drafting an Appealing Invoice Payment Reminder Letter
The above elements are the basics of writing a letter to clients with outstanding payment accounts. Below, we have enlisted some pointers you can consider to make your messages more effective:
Use a Polite Yet Firm Tone
Refrain from using foul language in your payment reminder letter. It creates a poor impression and tarnishes your reputation. Instead, opt for polite language that gets your message across to the client in the best way possible.
Also, use words that display firmness. Avoid using the phrase ‘requesting you to’ in your second or third overdue payment letter.
Give Clients a Deadline
It is essential to create urgency and mention a deadline for your customers. Furthermore, it helps to convince the client to make the payment at the earliest without wasting any more time. At the same time, it also gives them a chance to arrange for it in case they had forgotten about your bill.
Sign the Letter
Instead of sending the past due invoice letter on behalf of the company, let your representative write it using their name. Also, let them use their signature at the end. It is an excellent way to leverage the relationship between your sales staff and your clients.
Add Interest to Your Reminder of Overdue Payment
You are legible to add interest to your invoice amount when the client fails to pay for it within the specified time. This interest allows you to recover debts at the current market prices—to reduce the impact of the loss caused by late payments. Also, it pushes the customer to pay faster to avoid paying much more than their bill amount.
Don’t Add Too Much Data
Try to draft a strong letter for outstanding payment that is informative and result-driving. It should not open new lines for debate between you and your clients. Therefore, avoid getting into the details and write a simple message. They can reply to your letter if they want to cite reasons for non-payment.
Talk About Court Costs
Remind your debtors that they might need to cover the court costs if you initiate a legal proceeding against them. Also, subtly remind them how these things can hurt their brand image. Of course, you should resort to these methods only if this is your third or fourth payment reminder letter.
Encourage the Company to Contact You
Ask your client to contact you regarding the payment status. Tell them that they can reach you via several options. Being open to queries and sparking a two-way conversation might help you preserve your relationship with the company.
Keep Adding the Number of Overdue Days
Every letter for reminder for payment you send should include the number of days since the client failed to pay. Remember to add the days each time you send a different letter to them.
When Should You Send a Past Due Invoice Letter? (+ Templates)
Try to send out these letters at a gap not exceeding two weeks to see results. Push your clients to prioritise your concerns and settle your dues at the earliest.
Reminder 1: Two to five days after your invoice becomes overdue
It is your first reminder of overdue payment to your clients who probably intend to pay but missed the date. Nevertheless, it is the ideal time to reach out and inform them they missed a payment. There are high chances that most clients settle your dues after they get this letter, so be gentle. Note that this letter should only serve as a reminder and not talk about further action.
Here’s how you can draft your first letter for reminder for payment:
Alexandra Jones
York Developments Inc.
91 Downing ST
London
SW1A 2AA
Date: 25th July 2023
To,
George Smith
7 Whitehall
London
SW1A 2ET
Subject: Payment Reminder Letter
Dear Mr George,
This is to inform you that your invoice #52807 is not overdue by five days. Its due date was 20th July 2023, and we have failed to receive any payment from your side. The total amount pending is £845.
If there are any queries or concerns from your end, please connect with us using the contact details given below. We would be grateful if you could release the payment by not later than 30th July 2023.
We look forward to getting a reply from you soon.
Yours sincerely,
[Signature]
Enclosures: Invoice #52807
Reminder 2: Two to three weeks after your invoice becomes overdue
When you don’t get a reply even after days of sending your first reminder, it is time to pen down another past due payment letter. By now, you can be sure that the client is deliberately dodging your messages. Yet, there are possibilities that the concerned person is out of the office—for a trade event, business conference, or personal leave.
This overdue payment letter may help you grab their attention and get paid or at least get a response. Here’s a template:
[Letterhead]
25th July 2023
Robert Clapton
Tribrid Entertainment Ltd.
2 Nottingham Rd
Abergwesyn
LD5 6LT
Subject: Reminder of Overdue Payment
Dear Mr Clapton,
We write this letter to bring to your attention that your past invoices are still outstanding. Further to our earlier correspondence dated 8th July 2023, we have still received no response from your company.
Here are the details of your overdue bills:
| Invoice Number | Date | Due Date | Amount | Days Overdue |
| 107 | 01/05/2023 | 01/07/2023 | £520 | 24 days |
| 205 | 17/05/2023 | 04/07/2023 | £1,240.20 | 21 days |
We would be thankful to receive the payment for the said bills latest by next week. Or we would be obliged to add interest @5% according to our company policies. Please give us a call or reply to this letter should you have any queries.
We look forward to hearing from you.
Regards,
Tom Miller
[Signature]
No. of enclosures: 2 (Invoice no. 107 and 205).
Reminder 3: After one to two months of an invoice being overdue
Your third letter for reminder for payment should talk of you taking further steps if the client doesn’t pay the invoice as soon as possible. Inform them that you intend to pass on their invoices to a debt collection agency and charge a higher interest rate.
Find below the invoice payment reminder template:
Winnie Moss
Highteck Pvt. Ltd.
099 Southlands Rd
Pontefract
WF8 5TW
Date: 25th July 2023
To,
John Harris
34 Broomfield PL
Stone
HP17 9QW
Dear Mr. John,
This payment reminder letter is to notify you that your bill no. 982 is still outstanding. The due date was two months, and we tried to contact you several times over this period. However, we didn’t get any reply from you yet. We have attached the invoice copy for your perusal.
We have already added interest of £400 @8% to your account. Please remit the total amount of $1,560 to our account by 30th July 2023, or we will have to transfer your invoices to a debt collector. We will also have to take further legal action if you fail to settle your dues by the specified date. Please note that we need to add the court costs to your invoice with interest.
We look forward to hearing from you.
Kind regards,
[Signature]
If it is too much work for you to personalise such a letter for reminder for payment, try using PostGrid’s print and mail API. It can help you use variable data printing and create such mail items effortlessly.
One of our customers from Westminster wanted to send nearly five hundred such reminders to their clients every month. Also, they required an automated solution to mail invoices on time to their clients to receive their payments without any issues.
They got in touch with us last year, and PostGrid presented a two-in-one solution to their requirements. Now, they send almost 5,000 mailings monthly consisting of customer statements, invoices, receipts, and overdue payment letter envelopes. Also, they can track all their mailings on their system via our API integration. This integration lets them fetch client details in their CRM and send mail items to them directly.
Also, PostGrid offers several pre-built letter templates to help you draft your messages without using extensive graphic design tools.
How to Send an Overdue Payment Letter?
There are two primary options to send past-due invoices and letters- email and direct mail. Both are helpful for communicating your message to your clients, but which is more effective?
Direct mail gets a response rate of 9%. Also, it is more attention-grabbing and memorable than emails. Also, it is more persuasive than emails to get people to complete the CTA. Thus, the answer is- it is better to send your reminder of overdue payment via offline mail than email. You could combine both channels to form an integrated debt collection strategy.
The more platforms you can connect with clients having outstanding accounts, the better your chances of recovering the debt.
PostGrid’s print and mail services enable you to include custom QR codes and pURLs to your letters to track responses. You can print a QR code on your envelope and ask the client to scan it and pay you online instantly. It increases the influence of your past-due invoice letter and facilitates quick payments.
Automate Printing and Mailing Letter for Reminder for Payment With PostGrid
PostGrid serves various industries, including healthcare, financial services, real estate, etc. Our direct mailing services are spread globally and help you send your mail items to anywhere in the UK and the world.
You can integrate our API into your CRM and place orders whenever needed. However, we recently got a query from a top-tier client about triggered campaigns. Also, they were concerned about simultaneously tracking hundreds and thousands of overdue payment letter envelopes.
All we needed to answer their questions was one coffee meeting. Our sales staff is thrilled to meet up with clients at a place of their liking to present all the life-altering solutions they need for their business to grow. Do you want to get on a phone call with us? Call us straight up! Want to get a demo? Sign up, and we will get in touch with you in no time.
Coming back to the meeting- here are the points we discussed regarding sending past due payment letters:
- Campaign triggers: You can use our direct mail automation software to launch triggered campaigns on specific dates. Also, you may set other triggers like invoice generation, customer query, overdue invoice, etc., to automatically send a past due payment invoice letter to clients.
- Mail tracking: Login into your PostGrid account and navigate the dashboard to see the real-time status of your sent items. There is no need to enter hundreds of tracking numbers on Royal Mail’s website to know if your clients received the letter for reminder for payment.
- Monitoring: You may check your campaign reports and measure the performance with only a few clicks. PostGrid offers a streamlined experience to plan, launch, and monitor campaigns under one roof.
- No maximum limits: We offer several membership plans to our clients, depending on their budget and needs. There are no maximum or minimum mailing caps to restrict you.
We also discussed other aspects of an overdue payment letter, like design, client’s address data, postage options, etc.
To Conclude
It is a must for almost every company to draft and send a reminder of overdue payments to their clients. They need to ensure that their debts do not exceed their revenue. These letters are an excellent and economical way to communicate with clients and ask them to pay.
You can use the invoice payment reminder template in this blog or refer to it to create a message that best suits you. The goal is to remind clients about your invoice constantly and persuade them to settle the dues soon.
PostGrid can help you throughout the process and cut costs by more than half. Also, you can save a lot of time and effort by letting us do everything online for you.
Talk to our sales now, and let us talk about how you can send a payment reminder letter to clients smoothly and increase your revenue!
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The post How to Write Strong Letter For Outstanding Payment appeared first on PostGrid UK.
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