Do you have an overdue bill that you need to take care of? As a small business owner, it’s hard enough just to make the sale, but sometimes it takes extra effort to actually get the money due. Many businesses find themselves so busy working in the business that they forget to collect on money that is due, which is costing them a lot.
If so, you may be wondering what the best way to handle the situation is. One option is to send a past due letter template to the company. This can let them know that you’re aware of the situation and that you’re working on getting it taken care of.
Check out the steps below for more information on how to create and send a past due letter template.
What Is a Past Due Notice?
A past due notice is sent to inform a customer that their account with your company is overdue. This document will typically include the amount owed, the date of payment, and any late fees that may be associated with the account. The notice may also include information on how the customer can bring their account up to date.
How to Avoid Late Payments?
If you’re a business owner, you know that getting paid on time is crucial to your success. Unfortunately, some customers can be slow to pay – which can have a significant impact on your bottom line. To help avoid this, here are six tips to help keep your customers from paying you late.
Follow up at the Right Time
One of the best ways to avoid late payments is to follow up with your customers at the right time. This means sending a reminder shortly before their payment is due. This will help prompt them to take action and avoid any late fees or interest charges.
When you’re emailing a customer to remind them of an upcoming payment, be sure to attach their invoice to the message. This will make it easy for them to find and pay the amount they owe.
Sent to Multiple Places
Sending bills by email is cost-effective, but could be going to the recipient’s junk folder. Be sure to also send collection letters by postal mail to be sure they are being received.
Be Clear About Your Payment Terms
When you’re setting up an account with a new customer, be sure to be clear about your payment terms. This means specifying when the bill is due and what the consequences are for late payments. This will help set the expectation from the beginning and avoid any confusion down the road.
Make Payment Easy
In many cases, customers simply need a reminder that their payment is due. But you can also make it more convenient for them to pay by providing multiple payment options. These payment methods might include online payment options such as electronic bill pay or even accepting credit cards (but be sure to include any payment fees).
Enforce Late Fees
If customers know that they’ll be charged a late fee for paying after the due date, they’re more likely to take action and avoid those charges. Be sure to clearly communicate your late payment policy to customers so they’re aware of the consequences.
Consider Offering a Discount
If you’re struggling to get a customer to pay on time, you may want to consider offering them a discount. This could be a temporary reduction in their bill or even a longer-term arrangement. In some cases, this can be enough to incentive them to take action and avoid late payments.
Establish a process for following up on past due invoices
If you don’t already have a process in place for following up on an outstanding invoice, now is the time to establish one. This will help you stay organized and ensure that you are consistent in collecting payments.
How to Write an Overdue Invoice Letter?
Once you’ve decided that sending a past due letter or reminder email is the best course of action, it’s time to start writing. Here are some best practices to help you get started.
Include the Amount Owed
The first thing you’ll want to include in your letter is the original invoice number and the amount owed. This should be clearly stated at the top of the letter so there’s no confusion about the amount due.
Include the Payment Due Date
In addition to the amount owed, you’ll also want to include the invoice date the payment was due. This will help the customer know when they need to take action.
Include Late Fees and Interest Charges
If your account has any late payment fees or interest charges associated with it, be sure to include those in the letter. This will help the customer understand the full amount they owe.
Include Information on How to Pay
Make it easy for the customer to pay by including information on how they can do so. This might include online bill pay, automatic payments, or even accepting payment by credit card.
For bills that are several months behind, offering a payment plan to overdue recipients could be a way to at least receive some payment.
Include a Call to Action
Finally, be sure to include a call to action in your correspondence. This might be something like “please contact us to arrange payment” or “please make a payment by X date.” By including a specific call to action, along with your contact information, you’ll increase the likelihood that the customer will take action and pay their bill.
Having a process already in place and including language stating that you will send delinquent bills to a collection agency or legal action through a lawyer is a great way to motivate the payment of overdue payment.
Past Due Invoice Letter Templates
If you’re sending a first reminder letter, you’ll want to use a letter or email template to make sure all the important information is included. Here is a basic template to help you get started.
Subject Line: Payment Reminder – Invoice #123
Hi XYZ,
I’m just writing to remind you that payment on invoice #123 is due. The total outstanding amount owed is $XXX and the date of payment is XX/XX/XX.
If you have any questions, please don’t hesitate to contact me.
Thank you,
Your Name
Subject Line: Payment Reminder – Invoice #123
If you are looking for something more professional, take a look at these free past due letter templates that are available for download.
