Past Due Letter (12+ Best Sample Letters & Examples)

Late payments are a common occurrence for any business and can threaten the solvency of a company. The more unpaid customer accounts you have, the greater the liquidity problem. Outstanding debts not only lead to huge interest losses but if you end up having to compensate the payments with loans, you will have to incur additional costs.

Chasing clients to make their payments can be quite frustrating and uncomfortable for your business, and it can eat up your valuable time and resources. Hence the reason why you should learn how to write and send a past due letter that can help you improve cash flow and set your business up for success and make the whole process less tiring and encourage your clients to make their payments much faster. Here is what you should do:

A proactive reminder is usually sent 7-15 days before the payment is due. This is usually a polite and friendly reminder and can be considered as a courtesy call. Begin with “For your convenience” to show that this is not a nagging email, merely a courtesy call or a helpful gesture.

Keep the letter personal and friendly, and remind them of your payment methods.

Example:

Dear Paul,

For your convenience, I would like to send you a quick reminder that the payment for Invoice A7165F will be due on the 15th of August 2020.

You can make the payments via our bank account number (number) or via (any other payment methods you accept)

I hope you have a wonderful rest of your day and look forward to doing business with you again soon!

All the best,

Brian

First Past Due Letter

The first past due letter is usually sent the very first day the payment is due. It is important to let the customer know that you are aware of their delinquency and that you are on top of your Accounts Receivables. In doing this, you will have fostered a culture where the customer prioritizes your invoices. In most cases, most customers delay in making their payments due to disorganization or preference for longer payment terms -not malice. As such, your first past due letter should be cordial but firm.

When writing your first past due letter, use a more formal language to show your seriousness and to prevent the late payment as becoming a personal issue. To avoid tension or defensiveness, frame the letter delicately by saying, “Your account with us now appears as past due.” Make sure that you include the reference to the invoice, the Date it was due, and a short reminder of your payment policy.

Follow up this letter with a call. If possible, you can record your conversation for accurate record-keeping. If you don’t get any reply to this letter or if they fail to make the payments, resend after 45-50 days.

Example:

Dear Paul,

We would like to inform you that your account with us now appears as past due.

We would like to this invoice (invoice number) to your immediate attention.

You can make the payments via our bank account number (number) or via (any other payment methods you accept)

We would really appreciate it if you could let us know the status of this payment. Please call us on (phone number) if you have any questions regarding the balance due on your account.

As you already know, our payment terms are 45 days from the Date of issue of the invoice, and a late fee of 4% is charged to your account if the payment is not received within the 45 days of the Date of issue.

Thank you for dedicating your time to attend to this issue and your continued business.

Sincerely,

Brian

60 Days Past Due Letter

The likelihood of successful collection if an invoice is between 60-90 days past due. It is important that you follow up with calls during this period and send a series of string emails. An invoice that is past due for this long is less likely to be due to simple disorganization. It is likely that there is an underlying issue. This letter should be firm, have bolded words, and be written in a formal language. Given the reduced likelihood of collecting the debt successfully after this period, your follow up emails should include a payment plan or advice on how they can get some assistance to clear up their balance.

Example:

Dear Paul,

We would like to inform you that your account is now 60 days PAST DUE for the invoice (invoice number)

This issue requires your immediate attention. Kindly make your payment as soon as possible.

Invoice # Date due: __________ Amount:______________ + 4% late fees, assessed date: ______________

Payment options: __________

Kindly inform us as to the current status of this payment. Should you have any queries concerning this invoice or the balance due on your account, kindly contact us immediately.

We will continue to reach you to try and have this matter resolved.

As per our company policies, the payment period is 45 days. Kindly note that as per our policies, we are unable to continue doing business with a client who is currently past due, or who has been 60+ due.

Sincerely,

Brian

90 Days Past Due Letter

90-120 days past due invoices are significantly more difficult to collect on. Your follow up emails and calls should be firm and formal and should utilize different tactics such as bolded text or enlarged fonts. The letter should also state the numerous attempts you’ve made in trying to get the issue resolved and the consequences of their failure to make the payments.

Example:

Dear Paul,

This letter is very important and requires your immediate attention. Despite sending you several reminders, you haven’t made any attempt to clear your balance that is seriously past due. We feel that we have given you enough time and that we have been more patient with you. Therefore, we feel that there is no other recourse but to write off this debt and report it as a “bad-debt loss” to the ______________ through a filing. To avoid this, kindly remit your payment today for the full amount due. Should you fail to make the payment within the next three days, you will have no choice but to act.

The following invoice(s) require your immediate attention:

Invoice # Date due: ______________ Amount:______________ + 4% late fees, assessed date: ______________

Payment options: ______________

Kindly inform us as to the current status of this payment. Should you have any queries about this invoice or the balance due on your account, kindly contact us immediately.

Please reach us on (phone number) if you would like to set up a repayment plan.

As per our company policies, the payment period is 45 days. Kindly note that as per our policies, we are unable to continue doing business with a client who is currently past due, or who has been 60+ due.

Sincerely,

Brian

Final Past Due Letter

There is still some chance of collection for invoices that are over 120 days past due, and therefore, you should still consider sending additional communication. In your final letter, include the consequence of their failure to pay the debt (bad debt-write-offs, credit score) and any other language to let them know that you will be taking the appropriate actions to report their delinquency to collection agencies and other relevant bodies.

Example:

Dear Paul,

This letter requires your immediate attention. Despite sending you several emails and making several calls to get you to pay your debt, we have not received any response from you about your seriously delinquent account. We feel that we’ve given you more than enough time and that we have been more patient with you. Therefore:

• We feel that there is no recourse but to forward your account to the collection agency

• This action will severely affect your credit ratings

Kindly contact us immediately if you would like to set up a repayment plan

The following are severely past due:

Invoice: ____________________ Date due: Amount +4% late fee, issued Date

Payment options: ____________________

Kindly inform us as to the current status of this payment. Should you have any queries about this invoice or the balance due on your account, kindly contact us immediately.

Please reach us on (phone number) if you would like to set up a repayment plan.

As per our company policies, the payment period is 45 days. Kindly note that as per our policies, we are unable to continue doing business with a client who is currently past due, or who has been 60+ due.

Sincerely,

Brian

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      If you send out all the past due letters to your client and they fail to respond to your letters, make their payments, or set up a payment plan with you, you can seek out legal assistance by taking the case to the small claims court if the amount is not huge. You can also seek out legal services for advice on how to get the client to furnish their balance if the amount is above the limit of small claims court.

      Basic contents of past due letter

      • Your name and complete address
      • The name of your company and its complete address
      • The name of your debtor and their complete address
      • The date when the Past Due Letter is being sent
      • Details of the payment owed by the debtor
      • Amount of money that is involved in the transaction
      • The date when the debtor was supposed to pay you
      • The next deadline for payment
      • Any additional fees or fines involved due to late payment
      • An outline of the steps which your company will take in case the debtor does not respond positively to the Past Due Letter
      • The signature of the person or officer sending the Past Due Letter

      When writing a Past Due Letter, you should explain the transnational situation briefly. Make sure to indicate its elements clearly. Also, ensure that you are polite but firm. Let your language be clear and concise. Last but not least, indicate that payment by the debtor is required promptly before any further action is taken.

      Do not make any threats. Control your emotion and prevent it from spilling into the Past Due Letter. Also, do not write a Past Due Letter which is longer than 1 page.