Writing A Polite Payment Follow Up Email To Your Client
Everyone makes mistakes. Even your best customers and those with a record of on-time payments arent exempt. And although no one likes to collect from a bad payor or late-paying client, misplaced bills wont cancel out your negative cash flow. A polite email reminder is the first step of how to ask for payment professionally.
The first step is a call or reminder sent via email or snail mail reminding them of the past due status of invoices. That gives your customers the chance to explain their situation for the overdue invoice.
If your late-paying customer hasnt made payment within a set period of time, a couple of late payment reminder emails may get the results you need. Your friendly reminder email should be courteous, respectful and tactful. Otherwise, you may never see the funds.
How To Write A Past Due Invoice Email
Late payments are going to happen. Its a fact of business – and theres only so much you can do to control it. What you can control, however, is how you respond to them.
Weve discussed how to write quality invoice emails that will get you paid before. What happens, however, when theres an account that is 30 days late.
Or 60 days.
Or 90 days.
At that point, you may not be in the mood for pleasantries. So, how can you communications help turn these accounts into accounts received?
Here, well talk about best practices for overdue accounts and provide some past due invoice email samples.
Offer To Resend The Invoice
It’s helpful to offer to resend the invoice in case your client has misplaced the original copy. You can also include the invoice and reference it. This may save you time and effort, as you don’t need to send an additional reply if the client wants the invoice. Whichever method you choose to use, be sure to send the invoice as a PDF file so the client can view it properly.
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Overdue Invoice That’s 3 Weeks Past Due
Here is an example of a letter that addresses an invoice that is three weeks overdue:
I’m writing to inform you that I have not received payment for invoice number 66, which was due three weeks ago. I originally sent the invoice on August 13, and the total amount of $5,000 was due on August 30, 2021. I’ll attach a copy of this invoice below in case you need to update your records.
Please let me know if you have any questions about this invoice. Just as a reminder, I collect 3% interest for each day the invoice payment is overdue, starting 30 days after its due date. I’ll call next week if I don’t hear from you to ensure this email reaches you. Thank you for your time!
What Is The Difference Between A Past
From the time that you send an invoice to the time that its paid, its considered an outstanding invoice. If the due date passes and the invoiced payment is still outstanding, it becomes a past-due invoice.
This normally sets alarm bells ringing and prompts a suitable response.
As for an overdue invoice, it really depends on your use of language. Most commonly theres little or no difference between past-due and overdue, so you can simply use whichever one you prefer.
In the context of this article, though, were going to treat them as distinct.
Here, Ill be using overdue to refer to invoices that are not only past-due but also very late: past-due invoices that have lingered on long enough to make direct action necessary.
Consider that a past-due invoice might only be a day late, but an overdue invoice might be a month late.
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A Few Additional Tips
- Tracking and recordingRemember that its important to update your accounts receivable records once you get paid. Theres nothing more embarassing than sending a payment reminder for an invoice that your client has been paid for!
- Automating your payment remindersOne solution to this is sending automatic payment reminders with software like vcita. That way, youll only need to decide the reminder schedule, and the legwork of sending them out will be done for you. Invoicing software makes it easy to attach a link to your online payment portal right from the email, so your client doesnt have to hunt up any payment information. Once your clients invoice is paid, the software will update your records automatically.
Payment reminders arent just an administrative task theyll help your business stay afloat! If you invest a little time in organizing them, youll see a huge return on that investment in better cash flow and smoother client relationships.
Chasing Up Bad Payers
The definition of whats considered to be a bad payer is something that can drastically differ depending on who you ask.
If customer invoices are regularly becoming late overdue, it may be worthwhile distinguishing your business’ bad payers. As follow-ups can be adjusted accordingly for each group, to maximise your chance of prompt payments.The short of it is: most bad-paying customers are simply those that have built a reputation for paying past the invoice due date. If you were already expecting a customer to miss the due date of an invoice before it rolled around, thats a classic example of a bad payer. In general, chasing bad payers via email requires more focus on firmness and specificity, doing away with casualness and pleasantries . You also want to keep on top of bad payers more frequently than other customers.
Below is our recommended email sending schedule for bad payers. This schedule is optimised for businesses that sell on 30-day payment terms. For shorter or longer payment terms, weve noted adjustments below.
- 32 days before due – Confirm contact and invoice details
- Shorter / longer terms: Send 2 days before issuing the invoice
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Last Effort Before Sending To Collections
If you reach this point, its been three full months since your client purchased a product or service from you. The client had a month before their due date to satisfy their balance, this another is two months after that period. In other words, this is the worst-case scenario.
You might as well chalk up accounts that age this long as a loss and move on. That means calling up a collections agency that youre familiar with and giving them the reins.
Before you do, though, you should send the client one last reminder email that lets them know whats happening to your account.
When Do You Start Chasing An Overdue Invoice
As mentioned above, chasing payment for invoices is never smooth sailing, but it must be done. Coming up with an invoice chasing plan will help you accomplish as much as possible when it comes to this exercise.
This will depend on your business practices and what you want to achieve. Some companies will use a timetable and calendar when contacting their customers for each stage of chasing. Others will just wing it.
Here are some options
- Before sending the invoice Find the right contact within the company you will use to ask about payment.
- One or two days after sending the invoice. If you are dealing with a new client, you should request receipt of the invoice and ensure that it includes all information.
- Ten days before the payment is due At this point, its good to check in with the client to ensure that your invoice is being processed and due to be paid soon. As the client if the work is in their system and whether it is on the next pay run.
- One to two days past due
During this time, if there is a problem preventing the payment from being made, you should try to find out how you can resolve the issue and then do this at regular intervals till 30 days past the due date.
Remind the client that the invoice is overdue. Again, staying in touch with the client at this stage will ensure you know the kind of problems they are experiencing and why the invoice is past due.
- 30 days + overdue
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How Often Should You Send A Payment Follow
Research shows you can improve reply rates by 65.8% just by sending a single follow-up professional email reminder. Because your original email may have ended up in a spam folder, give your customer the benefit of the doubt. A polite reminder may pay off.
One week before the payment is due, try sending an email to your customer like this:
Email Subject: : Invoice #111119
I hope this email finds you well. I understand this may be a busy time for you, but I wanted to send out a friendly reminder that the payment for invoice #111119 will be due next Wednesday, October 6th.
Please feel free to reach out with any questions about this invoice.
Thank you in advance.
If a customer still hasnt paid on this late invoice, follow up on your initial email after one week with a friendly payment reminder. If that doesnt work, send another reminder in two weeks, then one month later. Be clear about how late the invoice is and ask them to reach out if they have questions or concerns. By now, however, your invoice may be overdue and your cash flow is suffering. Dont panic.
Youre not alone.Hilton-Baird reports that as a result of late payments, 79% of SMBs are forced to chase down invoices during regular business hours, which results in 48% making late payments to suppliers, and 10% turning down new business.
Send A Second Past Due Email Reminder
If the client doesnt respond to your phone call and the invoice is more than two weeks overdue, you can try sending a second reminder email.
This time around, be more straightforward and express the urgency behind the matter of receiving the payment.
Include all of the elements from the previous email, along with any new late fees.
Heres a sample of a two weeks overdue email:
I wanted to follow-up on my previous email sent on regarding the outstanding invoice , that was due on .
As outlined on the payment terms we agreed upon in our contract, I am now entitled to charge you a late payment fee of .
The total amount of payables as of today is .
Please pay in full immediately, to avoid any further action.
If after all these emails, the client decides not to pay up, you can look into mediation as an alternative approach to taking legal action. After all, no one wants to waste time and money on lawyers.
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Professional Payment Reminder Email Templates
Here are the most effective professional email samples that help you get paid on time and help you maintain accuracy throughout the invoicing collection process. This chasing payment email sample will help your client get a clear reminder of the actual amount, name, due date, and the possibility of late payment charges in case they dont pay immediately.
Why You Should Use Overdue Invoice Letter Templates
It is important to use these templates for a few reasons.
- Your message is consistent every time a client gets a letter from you, its the same or very similar message.
- It saves time- Instead of rewriting a letter every time you need to collect a missed payment, you will have a template ready to go that just needs a few edits
- Professionalism By having a consistent and official letter, it shows that you are professional, which is more likely to get you paid.
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Seeking Legal Advice & Mediation
The thought of seeking legal advice can seem overwhelming, and perhaps a little unnecessary. However, when it comes to monies owed and the cash flow health of your business, its simply a part of business.
Here, well cover three approaches you can choose depending on your situation. However, this is to be used as a point of reference only. We highly advise you seek legal counsel from a professional solicitor before taking action.
One Week Before Due Date
If youre like most organizations, you assign a due date for your clients payment one month after theyve received your invoice. In a perfect world, your customers would pay you the moment they received their bill in the mail.
But, this isnt always the case. Your customers might be on a different billing cycle than you so they wait until theyve received money to pay off their debts. Naturally, waiting opens up the door to forgetting that they owe you money altogether.
35% of people admit to missing a bill because they forgot about it.
Thus, its a good idea to send a payment reminder email to your clients one week before its due.
This email should use an optimistic tone. In other words, you should frame it in a more customer-centric way. After all, their account is still in good standing with your organization.
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Dont Miss Out On Any Details
Always add important details to your invoices. Missing out on them can increase the payment timeframe significantly. Moreover, mistakes and inaccuracies in invoices leave a bad impression on clients.
You may have to suffer huge losses due to such errors or inaccuracies. Imagine your accountant drafted an invoice for $1,000 instead of $10,000. In this case, your client may refuse to pay the actual amount making you lose a lump sum of greens.
In the same way, it is important to draft precise past due invoice letters. To help you with the same, here is a checklist that you need to take care of while drafting your invoice letters:
What You Should Do If An Invoice Is Less Than 90 Days Late Or More Than 90 Days Late
Unfortunately, the longer the invoice goes unpaid, the more unlikely it becomes that the client is going to submit payment. If youve used these templates to send your payment reminder emails and the invoice is still unpaid, it may be time to use a debt collection agency. Let the client know that if the invoice is not paid, the collection agency will be getting in touch with them. This could serve as enough motivation for your client to pay.
However, if this does not work, it may be a matter that needs to be taken to court. Of course, this route must make sense for you depending on the amount of the overdue invoice and whether court costs and litigation will be worthwhile to your business.
Outstanding and unpaid invoices create unwanted challenges for all business owners and managers. With these tips, templates, and Square automated invoice reminders, you can take some of the stress off your shoulders and remain professional when you ask for client payments.
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