No matter how successful an organization is, it can still become a victim of cash flow problems. In fact, research by payment giant BACS found 76% of businesses are being affected by late payments of up to six months beyond the terms agreed in contracts, which is why chasing late payments is a vital part of company operations.
While no business, large or small, can afford to let the issue of collecting money owed slide, a careful balance between getting paid and not jeopardizing future working relationships needs to be found. Having a selection of late payment invoice templates at your disposal can help you raise the issue diplomatically and avoid any awkwardness.
Here are four of the most useful email templates to choose from:
1. Due soon message
The due soon format is the perfect example of addressing a situation before it becomes a problem and reminding a client that their invoice is due to be paid before an imminent date. Make sure it includes the payment terms and any penalties that will be levied on invoices that are paid late to help companies see the advantage to them of settling their bill quickly.
Due soon emails are a good way of ensuring your invoice hasn’t been lost amongst other paperwork, but it’s important they don’t sound pushy. The best approach is to keep it relatively short and clear, while maintaining a friendly tone throughout.
Hi [customer’s name]
This is a quick note to remind you that invoice [number] is due on [date]. [Company] appreciates your swift payment.
Please be advised that we charge a standard late fee of [amount] as per our payment terms.
Kind regards,
[Your name]
2. Due now reminder
A reminder on the day the invoice is due is a common practice and a useful time to get in touch, as the customer is still not yet late in their payment. This helps to keep the tone friendly, but should be slightly more urgent than a due soon notice.
Hi [customer’s name]
Our records show that invoice [number] is due today. [Company] would appreciate the payment being arranged as soon as possible.
Please be advised that we charge a standard late fee of [amount] as per our payment terms.
Kind regards,
[Your name]
3. Overdue notice
Deciding on the best timing for sending an overdue notice will depend on a number of factors, including the type of business you’re in, the relationship with the client and your payment terms. It’s important to take any correspondence you’ve had with the client into consideration, as they may have been in touch with you or one of your colleagues to explain the late payment. If this is the case, you may wish to diverge from the standard notices and create a more nuanced approach.
If you haven’t heard anything, then don’t back away from sending an overdue message. It’s important to be firm and to reiterate expectations as per the payment terms. While the tone of this notice must remain professional, it’s likely to be moving into more formal territory and should convey a sense of urgency.
Dear [customer name],
Please be advised that invoice [number] is now [X] days overdue and beyond the payment terms. Please arrange the payment as soon as possible to avoid escalation and a fee being added to your account.
Kind regards,
[Your name]
4. Very late payment notice
By the time you send out a very late payment notice, the business should be thinking about taking the next steps to ensure you receive what you're owed. This may well be a legal route, as reminders and notices haven’t had the desired effect to spur your client into action. Don’t be afraid to spell this out in your message and be prepared not to work with the client again in the future as its history of late payments shows it could be bad for your own business.
Dear [customer name],
This is a final reminder that invoice [number] is now [X] days overdue and beyond the set payment terms. An overdue charge of [amount] has been applied to the account. If payment isn’t received by [date] [company] will start legal proceedings.
Regards,
[Your name]
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