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Write Overdue Invoice Letter to Get Paid
Any work should be paid. Unfortunately, there are situations when customers forget about it or intentionally do not transfer money for a completed order. How to be in such a situation? How to collect past due invoices? And what levers of pressure do you have at your disposal? You’ll find answers to these questions and effective solutions in this article.
What Is an Overdue Invoice Letter?
Commercial invoices for contractors and freelancers are used to claim compensation for products provided. It’s issued after the work on the order is completed. Along with sending a file, it’s recommended to write an invoice follow-up email, specifying brief information regarding the order and the amount to be paid. Such a polite and gentle message encourages timely payment. After that, a recipient has a certain period during which money should be transferred to your account.
Suppose you still have not received the compensation due. In that case, you need to write a friendly overdue invoice letter with a reminder and clarification on whether everything is in order with a customer. It may well turn out that they simply forgot about the payment and not maliciously didn’t pay. If a recipient is still ignoring you, move on to more active steps. Send a strong letter for outstanding payment stating that you’ll begin to accrue interest for late payment and that if you don’t receive the money soon, you’ll apply legal actions.
By the way, there are tools to protect businesses from dishonest clients. So, for example, you can contact the third party in advance and use finance invoices to avoid losing the funds.
Ready to Get Started?
So, what is an outstanding invoice? It’s a document that has expired, and you still haven’t got payment from a client. Of course, you do not want to allow such situations, so you need to gently remind an orderer to transfer funds to you before the end of the agreed period. Whether generated manually or using SaldoInvoice, your invoice should clearly state the time during which you are waiting for payment. It may be indicated by a specific date or given as, for example, “Net 30, 45, etc.” The second option shows that a recipient has 30 or 45 days to make a payment from the moment the invoice is issued.
To motivate orderers to pay quickly, offer them a discount. Your contract and the Excel, PDF, or Google Docs template invoice should reflect such an offer. For example, the phrase “5/15 Net 45” means customers will receive a 5% discount if they transfer money within the first 15 days.
When the payment deadline has expired, and the money has not arrived, it’s time to write a reminder. When compiling an unpaid invoice past due invoice letter, it’s essential to use the correct terminology. Avoid jargon and slang, attach copies of late invoices to each text if a client has lost the previous ones. It’s a good idea to ask leading questions in a letter, such as when you should expect funds to arrive. It’ll force a recipient to write you a reply.
Do not send letters randomly; it’s better to stick to a certain schedule. Remind clients about payment a couple of days before the end of the period, then a week or two after the deadline. After that, write them a 30 day past due letter with a persistent reminder of the debt, then 60 and 90 days past due letter with a notice of legal actions on your part.
Past Due Invoice Email Sample
Collecting past due invoices can be quite nerve-wracking if you don’t know what to do and how to compose reminders. Here is a template for a general debt letter:
Letter For Unpaid Invoices
To: [the client’s legal name]
Subject: [your company’s name and invoice ID]
Dear [client’s name]
I hope you are doing well!
As I haven’t received your payment, I wanted to remind you that the invoice [its issue date, ID, and sum due] is 14 days overdue. Could you please specify when I can expect payment from you? If you’ve got any issues or questions, just let me know.
I’ll be waiting for your response.
Best regards, [your name and title]
It is essential to maintain direct contact with customers and save all correspondence. In the event of litigation, you’ll be able to prove that you did everything possible to get paid on time.
Establishing contact and reminding about the delay
Begin your letter by entering key details to establish the context:
- Supplier Identification Data: Include your name, address, and contact information.
- Customer Identification Data: Provide the client’s name, address, and contact information.
Next, incorporate a clear reminder about the delay:
- Overdue Invoice Details: Clearly indicate the overdue invoice number.
- Due Date: State the original due date of the invoice.
This approach makes your message more personal and ensures that the client realizes the urgency of the matter.
Description of overdue payment
In your letter, specify the amount of the overdue payment and the due date. Remember, the key to effective debt collection is transparency and direct communication. Re-provide details of the services performed or goods delivered as part of your overdue invoice reminder.
Call to action and setting a new due date
Don’t be shy about expressing your expectation of payment and request for an immediate decision. After all, you’ve provided a service or goods and deserve to be paid. Set a new specific deadline for the payment of the overdue invoice.
Clarification of possible consequences and further steps
Clarify the possible negative consequences of non-payment of the overdue invoice. A useful tip here is not to threat; it’s about informing them that failing to address the overdue payment could involve a collection agency, potential legal implications, or a negative impact on their credit score. Propose cooperation and a search for a mutually beneficial solution. This could involve negotiating a payment plan, or offering advice on how to prevent such issues in the future. Maintaining a positive relationship while dealing with debt collection is critical to working with the client again.
Completion and gratitude
Finally, wrap up your letter with appreciation for their attention to the matter. Include your contact information for further communication and resolution of questions. This invites an open dialogue, demonstrating that you’re invested in finding a solution while handling the situation with professionalism and patience.
Remember, your primary goal is to get paid, but preserving a positive business relationship is also important. This will help in ensuring continued business, future opportunities, and a more efficient invoice process. As always, maintaining a friendly, respectful approach is key to achieving this.
What will help to warn against overdue invoices?First, you may always use the invoice precisely, not a receipt or other document type. The invoice contains complete details about a customer and your services. So, it's easier to avoid payment delays. There are a lot of services where you can create reminders about payment for your client. Use them the day before payment time. Also, try to take prepayment for your service or product. Use our recommendations, and we hope you won't face an overdue issue.
Which invoice is better for the customer to pay on time?It is not about the type of template you will use. Still, you can indicate a clear time frame in a document to motivate a client to pay duly.
When is it better to start reminding about overdue payments?It all depends on whether you pointed out any payment terms in an invoice. If a customer is overdue for a payment, you should send a reminder and direct a client's attention to it. Next, you can express a desire that it's better to stick to a specific schedule.