Late payment reminder templates

Chasing late payments is often part of running a business. Research revealed 77% of small business owners worried about damaging client relationships by chasing late payments, and 76% believed that pursuing outstanding invoices would damage their chances of being paid at all.

So how do you approach late payments? This article walks you through the standard procedures for chasing late payments and we’ll show how to word emails at each stage.

●        What is credit control for late payments?

●        A step-by-step guide to late payment reminders with templates

Credit control is the process of sending reminders for late payments where customers have failed to pay within either the mandatory 30-day payment term or an agreed period arranged between the business and the client.

When invoicing a client, you should always include the payment terms so that you can then follow up once those payments become overdue.

It is important to discuss credit control measures with your customers so that they are informed about what you expect in return for your services, and it also shows you take your business seriously. 

If your invoice is still unpaid after the payment term you must first check that you included all the correct information on the invoice and sent it to the right customer, just to cover yourself. Double-check:

• Invoice date
• Total amount
• Customer details (name, trading name, address)
• Your payment information/bank details
• Payment terms

When you are following up, keep a record of all communications you send and receive. This proof will support your case if you need to resort to legal means. For example, send an email after you do a follow-up phone call, summarising what was said and asking for confirmation.

Let’s look at some templates for emails of how you can address the issue. Edit the templates as you see fit to ensure that it fits the ‘voice’ of your business, and you can always add in any pleasantries if you have close relationships with these customers.

If it’s nearing the end of the payment term, and you haven’t received the amount yet, send the customer an email with all the relevant information they need to make the payment on time before it’s overdue. This reminder also acts as a nudge in case they have accidentally forgotten, and using a polite tone will ensure you don’t damage any relationships you’ve built.

Subject line: [insert your business name here] – [invoice reference]

Dear [customer name],

I’m getting in touch with you in regard to the following invoice:

[invoice reference] – [invoice amount] for [brief summary of the work you performed].

The invoice is due on [due date], and I would greatly appreciate it if you could confirm receipt of this invoice and advise if payment has been scheduled.

I have attached a copy of the invoice for your reference. If you require any further details from our side then please let me know.

Many thanks,

[your name]

Once the invoice is late by a few days, it’s acceptable to chase the payment. If you charge fees for late payments, then mention them at this point.

Subject line: [business name] – Overdue Invoice – [invoice reference]

Dear [customer name],

Following up on my previous email, I’m getting in touch about the outstanding invoice.

[invoice reference] for [amount]

This invoice is now overdue, so could you please advise me of the status of the payment. Please let me know if there are any issues that have delayed the payment, and we can send any relevant information to you promptly. 

I have attached a copy of the invoice which includes the due date and payment terms for your reference.

Many thanks,

[your name]

Once payment is overdue, you are legally entitled to add 8% interest or compensation. Include this information when you chase the payment, as well as attaching a new invoice with the updated amount due if you choose to add the interest.

Subject line: [business name] – Overdue Invoice – [invoice reference]

Dear [customer name],

Further to my previous emails, I’m contacting you about the invoice due to [your business name] for [invoice amount].

(OPTIONAL) I have attached a copy of the invoice with added interest, as the payment is now more than 14 days overdue. If you’d like to discuss the added charge please get in touch and we can go over the details.

Please advise of the status of the payment as the invoice is now more than 14 days overdue, and if I can provide any further information or documentation to allow your payment, then do let me know.

Best wishes,

[your name]

At this point, you have contacted the client several times, both by email and potentially on the phone too. At this point, if you have not been paid, your next communication should let them know you are looking into other means to collect the payment.

This is a final reminder, and you should let them know that this is the last chance before you proceed with legal action.

Subject line: [business name] – Overdue Invoice – [invoice reference]

Dear [customer name],

I’m getting in touch about the invoice [reference] for [amount] that still remains unpaid.

After several attempts to contact you with no payment, we will shortly begin legal action in order to collect the money you owe for our services. If we receive the payment immediately then we will close the issue without legal intervention. Please get in touch if there is anything you need from our side to get this closed.

The final invoice is attached for your reference.

Regards,

[your name]

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