We all know asking for money isn’t an easy task. This is especially true if you run a business that is associated with collecting money from customers. Even after successfully delivering goods/services to your clients, they may sometimes forget to pay their invoices duly. As a business owner, you need the cash to improve your cash flow. But chasing clients for money can be uncomfortable and challenging for many. If you ever find yourself in such a situation, you need not worry. A payment reminder letter will help you get sorted.
A Payment Reminder Letter is a document written to a client reminding them to pay or their outstanding invoice. The letters offer a convenient and professional way of requesting for what’s rightfully yours. In fact, it helps you choose your words in a friendly way that will not jeopardize your relationships with your customers.
As business people, you will probably face late payment more than you would expect. But when such predicaments present, you would certainly get worried about where to start writing your reminder letters. Therefore, the following are some common components you will highly include in your letter.
In any payment reminder letter, it’s very important that you include your company’s letterhead. The letterhead should include your personal details such as name, job title, and company address. By mentioning your personal details, you make it easier for the customer to identify you much easier. On top of this, you can also include the date of writing for record purposes.
The Recipient’s Address
The other thing you need to include is the client’s personal details. This should include physical and contact information. When adding the recipient’s details, make sure the information is as accurate as possible. In other words, make sure that your letter is addressed to the right person. If, for instance, you miss any detail, your letter will land on deaf ears.
This is the first paragraph of your letter. In this paragraph, the author politely reminds the client of the pending payments of the goods or services earlier received. As a bonus, be sure to mention the invoice number, the amount needed, and the date on which the payment was due.
This paragraph is often the longest. Here, the author should let the customer know why the company wants him/her to settle the outstanding dues. The tone of the body should be moderated with the type of letter. For instance, if it’s the first payment reminder letter, be sure to use a more polite tone. However, if it’s the third or last reminder letter, then a more assertive tone will suffice.
Again, you can let the customer know what repercussions awaits them should they fail to honor their dues. Make sure you present yourself in a clear and understandable manner.
This is the closing paragraph. Here, the author should reinstate once again the importance of paying the debt. For instance, if your company wants to restock, make sure you indicate exactly that. In order to remain professional, make sure you use kind words despite the inconvenience caused. Once you are done with the conclusion, you need to add your name, followed by your official signature.
Tips to Consider when Writing a Payment Reminder Letter
If you want a letter that will get you paid nice and easy, you need to go the extra mile and furnish your letter like a pro. That being said, the following tips will help you get a letter that works as per your desires.
- Write A Letter At The Right Time.
One thing that distinguishes the reminder letter from the rest is timing. Sending your letter at the right time has a significant effect on its payment. According to experts, for instance, sending the letter on the weekend can be a wise idea as your customer will have little to think. If you intend to send an electronic letter, then the best day to email is on Tuesday. Again, you can send the letters a day after the invoice is due.
- Include Critical Details About Your Payment
When writing the letter, make sure you include all the information that will make it easy for the client to understand. This will include the invoice number, the amount owed, payment terms, and contact information.
- Modify Your Language
As aforementioned, the language used when writing payment reminder letters should be polite and professional. However, the urgency should increase as the days pass. If the invoice is past 15 days, you need to be too polite to affirm your relationship with the client. If the invoice is 30 days overdue, the language should express urgency. However, if the invoice is 60 days overdue, then you need to be very strict on the payment. Let the customer know how urgent you need the payment.
- Offer A Payment Plan.
Sometimes, your client may get discouraged by the huge invoice bill that they have to pay. Therefore, in order to make the walk lighter or them, you can offer them a better payment plan. For instance, you can divide the invoice into small manageable chunks. This will increase the chances of your debt getting paid.
Payment Reminder Letter Samples
[Authors title & company]
[Authors address & contact]
[Name of the recipient]
Re: [1st, 2nd, 3RD OR Final Payment Reminder Letter
Dear [Recipients name],
I am contacting you on behalf of Greenstone Company Limited with regard to the following invoice number [………..].
This invoice was due for payment two weeks ago. We would highly appreciate it if you submit the payment by cashier’s check. As you are aware, we want to do our annual inventory so as to restock for the next financial year.
Note that payments should be made at the latest 2nd December 2020. Otherwise, we would be forced to forward your details to the debt collection agency. Also, note that we accept payments made through installments. If you have any other questions or concerns, please don’t hesitate to get in touch through [Input your contact details].
Thanks for your time.
[Input your name]
[Input your signature]