Late Payment Reminders: How To Make Sure You Get Paid

As a small business owner, you trust that your clients will pay you promptly after completing a job. Unfortunately, that may not always happen. Sometimes, clients may fail to settle invoices on time even if you provide top-notch service. It's inevitable.

You'll need to send late payment reminders if clients don't pay you on time. While following up on late payments can feel like walking on a tightrope, it doesn't have to be daunting. In this guide, we'll provide you with helpful tips you can use to ask for overdue payments.

Jump to:

• Tips for Optimizing Your Late Payment Reminders

  • 1. Create Multiple Payment Reminder Templates for Different Scenarios

  • 2. Maintain a Firm and Professional Tone Without Being Accusatory

  • 3. Always Include Relevant Payment Details and Records

  • 4. Try Not To Escalate, But Mention Legal Action if Several Days Overdue

  • 5. By the 90-Day Mark, Don't Be Afraid to Hire a Professional Collection Agency

• Take the Stress Out of Overdue Payments

Tips for Optimizing Your Late Payment Reminders

Source:

When sending late payment reminders to clients, you'll need to be courteous but firm. But how can you find the right balance without appearing too meek or overly aggressive?

If you're unsure about how to ask customers for overdue payments, here are five helpful tips you can use to optimize your late payment reminders.

1. Create Multiple Payment Reminder Templates for Different Scenarios

When writing a late payment reminder email, there isn't a one-size-fits-all email appropriate for every delinquent client. Ideally, your overdue payment emails should vary depending on how long the payment is past the due date.

For instance, the tone you use in an email for an invoice overdue by two weeks shouldn't be identical to the one you use in an email for a payment one month past the due date.

Bearing that in mind, here are five different late payment reminder templates for different situations.

One Week Before Payment Is Due

Some clients may fail to make timely payments because they've forgotten the due date. As many as 35% of people admit to missing credit card payments because they forgot about them. The same can happen with your invoice.

Therefore, you should send clients follow-up emails at least one week before the invoice due date.

Keep in mind that at this stage, the client hasn't failed to make the payment on time, so you'll want to use a hopeful tone in your email. Here's an email example:

Subject: Follow-up on invoice [invoice reference number]

Message: 

Dear [customer’s first name],

I hope you're well. I'm sending this as a courtesy reminder that invoice payment [invoice reference number], sent on [date invoice sent], is due on [invoice due date].

You can make your payment via [payment methods].

Please find an original copy of the invoice attached. If you require any assistance, don't hesitate to reply to this email. I'll be glad to help.

Best regards,

[Your first name]

This email is effective because it's courteous, brief, and informative. It provides necessary information such as the invoice reference number, payment methods, and due date so that the client keeps the payment top of mind.

The email doesn't confront the client to make the payment because it isn't due yet. As a result, it may make the client more willing to make the payment early.

The Day of the Payment Deadline

If you received payment after sending the first email, that is great! If not, you might need to follow up with a late payment reminder email on the actual due date. 

Like the first email, the email you send on the day of the payment deadline does not need to be confrontational. Instead, it should be a friendly and straightforward reminder that the payment is almost due. Here is an example email template:

Subject: Invoice [invoice reference number] is due today

Message: 

Hi [customer’s first name],

This is a courtesy reminder that invoice payment [invoice reference number], sent on [date invoice sent], is due today.

You can make your payment via [payment methods].

I have attached a copy of the invoice with the payment details. If you have any questions concerning the payment, feel free to get in touch. I will be glad to clarify anything unclear.

Best regards,

[Your first name]

This email is effective because it goes straight to the point and is concise. It also uses bold to emphasize the phrase "due today" to create a sense of urgency. 

One Week After Payment Was Due

Unfortunately, some clients won't pay you even after you send the second follow-up email. While you may want to send a harshly worded email to these clients or stop following up with them, don't do any of these things. 

Instead, use a more forthright approach in your third late payment reminder email. At this stage, you may also want to reassure clients that their accounts are still in good standing. Here's an effective payment reminder email template:

Subject: Invoice [invoice reference number] is one week overdue

Message:

Hi [customer’s first name],

Our records show that we haven't received your payment for invoice [invoice reference number].

However, don't worry. You haven't incurred any late fees yet.

You can still make the initial payment via [payment methods].

Please let me know whether you need any assistance settling the payment.

I have attached a copy of the invoice just in case you misplaced it.

Best regards,

[Your first name]

Unlike the first two emails, this email uses a more direct approach. By reassuring clients that they haven't incurred any late fees yet, the email also makes clients feel like the debt is manageable while hinting that it could escalate. As a result, it may convince clients to settle the invoice before they incur additional fees.

Two Weeks After Payment Was Due

If the customer hasn't paid you two weeks after the invoice due date, it could be a sign you're dealing with a delinquent customer. Therefore, you'll need to use a sterner tone in your reminder letter for late payments. Here's an overdue payment reminder template with a firm but professional tone of voice:

Subject: Invoice [invoice reference number] is two weeks overdue

Message:

Hi [customer’s first name],

I am writing to remind you that we haven't received your payment for invoice number [invoice reference number]. The invoice is now two weeks overdue.

If you have any questions or concerns regarding the payment, please get in touch. Otherwise, please pay the outstanding amount as soon as possible to avoid late fees.

You can make the payment via [payment methods].

As a reminder, penalties accrue after [X] week past payment. I look forward to hearing from you. 

Best regards,

[Your first name]

You need to use a firmer tone in this email than in previous emails. However, your approach shouldn't come across as rude.

Instead, you can use tactics such as reminding clients that they'll incur late penalties or interest fees if they don't settle the invoice. Alternatively, you could warn clients of service disruption if you're still providing a service when they haven't paid.

One Month After Payment Was Due

If the customer still hasn't paid you after receiving your previous emails, stop sending reminder emails for a while. While this may sound counterintuitive, you should stop sending reminder emails to prevent delinquent clients from becoming email fatigued.

After you've waited a bit, send another reminder email one month after the invoice due date. Here's a template you can use:

Subject: Final Reminder: Invoice [invoice reference number] is one month overdue

Message: 

We still haven't received your payment for invoice number [invoice reference number]. The invoice is one month overdue, and this email is your final reminder.

As stipulated in the payment terms, you've now incurred a late fee penalty. 

I have attached an invoice with the outstanding amount and payment details for your reference.

Please get in touch if you have any queries concerning this payment. Otherwise, please settle the outstanding invoice as soon as possible.

Best regards,

[Your first name]

You can use a much sterner tone in this email than in previous emails. You can also use ultimatums to get the customer's attention. For instance, in the above template, we used "final reminder."

Moreover, you can also remind clients about payment terms to encourage them to settle late invoices before the late fees escalate.

2. Maintain a Firm and Professional Tone Without Being Accusatory

Dealing with clients who don't make payments on time can be frustrating. However, your reminder emails to them shouldn't come across as accusatory. They should maintain a polite and professional tone throughout. 

That said, here are some best practices to follow when writing your emails:

• Use a friendly opening statement: Begin your emails with lines like "I hope this email finds you well" or "I hope you're doing well." While these statements may feel trite, they can help to get things off on the right foot.
• Avoid "you" statements: "You" statements like "You have to pay us by September 14" can come across as accusatory. Instead, say, "Payment is due on September 14."
• Use empathetic language: Some clients have hectic schedules. As a result, they may forget to pay you due to other priorities. Thus, consider using an empathetic tone in your emails. For instance, you could use phrases like "I know you have a hectic schedule or "I know you're swamped" in your emails.
• Offer to help: Some clients may genuinely have trouble making payments. Ask if you can provide assistance or clarify anything in your conclusion.

3. Always Include Relevant Payment Details and Records

When sending late payment reminder emails to customers, you should always include relevant information and documentation to make the payment process as frictionless as possible.

Here are some key details and records you should include in your emails:

Original Invoice and Overdue Invoice

In 2019, customers received an average of 121 emails daily, and that number is likely increasing every year. - Campaign Monitor

Just like you, customers don't want to rummage through all these emails looking for your invoice and are less likely to pay you on time. Make their lives easier by attaching their invoices to your reminder emails. Alternatively, provide links to online invoices if you're using invoice software.

Friendly Reminder of Payment Terms

If the payment terms aren't clear, clients may not pay you promptly. Worse, unclear payment terms could lead to erroneous payments and prove costly. 

To avoid these situations, make sure you include the following payment terms in reminder emails:

• The invoice issue date
• The invoice due date
• The outstanding amount due

Late Payment Fees

Remember to include late payment fee disclaimers in your reminder emails to clients who haven't paid you after the due date. However, you can only do so if a late payment charge is in the original contract.Source: Handle 

Payment Options

Include all the payment methods you offer in your reminder email. If possible, provide your customers with flexible payment options like cash, checks, and online payments.

Offering many payment options can increase your chances of getting paid faster. 

4. Try Not To Escalate, But Mention Legal Action if Several Days Overdue

If you're dealing with clients who haven't paid their outstanding invoices and are unresponsive to emails long after the payment is due, you should consider mentioning legal action.

Legal action may jolt even the most stubborn clients to settle their unpaid invoices because they want to save face, so it's worth a shot. However, legal action can be costly, time-consuming, and emotionally draining, so you may want to exhaust other options before taking legal action.

5. By the 90-Day Mark, Don't Be Afraid to Hire a Professional Collection Agency

If the client remains unmoved after you mention legal action, don't hesitate to hire a professional collection agency. Forwarding the client's details to a collection agency can negatively impact the client's credit score, which may nudge the client to settle the outstanding invoice.Source: QuickBooks

Be aware that hiring a collections agency will undoubtedly sever your relationship with the client, so you only want to consider it a last resort.

Take the Stress Out of Overdue Payments

Nearly 50% of U.S. businesses' invoices will become overdue. That means you will likely need to follow up on late payments if you do not currently do so. 

Following up on late payments is not an easy task. Following up on numerous late payments can prove even more challenging, especially if you lack time. But it doesn't have to be.

With GoSite, you can schedule and send overdue payment reminders to clients at specific intervals so that your customers keep your invoices top of mind. You can also automatically generate detailed invoices and send them to clients with just one click. Try GoSite for FREE today!