How to handle late payments : advice, templates, and best practice

So you’ve processed your invoice using Kiwili’s invoicing tool, but the client hasn’t responded? Bringing up a late payment with a client is always a delicate situation. In our article, Five Actions To Take In The Case Of A Late Payment, we explain how best to respond when dealing with a client who hasn’t paid their bill on time. Most notably, we explain the first thing you can do when an invoice goes unpaid after the period specified, send a polite reminder by post, or by email. Over time, writing out these reminders manually can become time-consuming and tedious, which is why we’ve compiled our how-to guide with information on what to include in your message and some writing tips. Finally, we show you some example letters, email reminders, and formal notices to pay.

 

For the first reminder, you have the choice of reaching out to your client by letter, or by email.

• By letter: If you generally communicate with your client by email, they could perceive your letter as a formal act and even panic when their late payment was no more than an honest mistake. This can risk changing the dynamics of your working relationship, and even damage things unnecessarily. If you have already reminded your client that their invoice is due by phone, then a letter could be particularly appropriate. However, only you know your client, and the intricacies of your professional relationship. Consider how they’ve behaved in the past, and if there have been any warning signs that they’re experiencing financial difficulty. Go with your gut instinct on how best to proceed but remember, you must always remain polite and professional. 

 

• By email: On the other hand, if you go with a simple email, you risk the client not picking up on your formality and the seriousness of this late payment. In this scenario, you should pay close attention to the wording of your reminder, so that it expresses your discontent all while remaining polite. 

 

What Should Be Included In Your Message

Regardless of which format you choose for your message, there are several elements that absolutely must be included:

• The invoice number 
• The amount due
• The date on which the payment should have been transferred
• Your contact details (at the end of the message for an email, in the header for a letter)

 

Some Tips For Writing Your Reminder

• Even if you’re annoyed by this late payment, try not to let it show
• Adopt a polite but firm tone in order to maintain a healthy business relationship
• Don’t forget to use appropriate forms of address
• As this is only the first reminder, there is no need to mention legal action at this stage
• You can include the unpaid invoice in question as an attachment if you like
• Go with a short message, get straight to the point
• Pay attention to the wording of your message: it must be short, precise, and include the words “late”, “invoice n°XXXX”, or “reminder”. If your letters and emails are on different topics, you should disclose this using an appropriate heading in the subject of the message.

 

Examples of Email Reminders / Reminder Letters

Example of an Email Reminder

 

To: Email address of recipient 

Subject: Late payment of invoice n°XXXX

 

Dear Mr X, 

To date, you haven’t yet paid invoice n°XXXX, an amount of X which was due on the MM/DD/YYYY, as payment for the services I carried out for you. 

I have no doubt this was a simple mistake on your side. Can you therefore process this payment as soon as possible? 

Thank you in advance, 

Signature 

 

 

Example of a Reminder Letter

 

Name of your company
Address of your company
Postcode/ town
Phone Number 

 

Name of client’s company
Client’s address
For the attention of Mr X
Postcode/ town
Date MM/DD/YYYY

Subject: Late payment of invoice n°XXXX

 

Dear Mr X, 

I recently carried out the following services for you (describe services provided). On this basis, we agreed that you would pay your invoice n°XXXX amounting to X, before the MM/DD/YYYY.

However, to date, I haven’t yet received payment for this invoice. I have no doubt this is simply a mistake on your side. 

I kindly ask you to process this payment as soon as possible. 

 

Best Regards, 

Name of sender
Signature

 

 

It’s possible that even after this message, your client still won’t pay their invoice.  In this case, you can phone them, and then wait for a reasonable length of time after the call. As a last resort, you can send them a letter of formal notice by recorded delivery, in order to obtain a confirmation of receipt. 

 

Example of a Letter of Formal Notice

 

Name of your company
Address of your company
Postcode/ town
Phone number 

 

Name of client’s company
Client’s address
For the attention of Mr X
Postcode/ town
Date MM/DD/YYYY

Subject: Formal notice for payment of invoice n°XXXX

Dear Mr X, 

I recently carried out the following services for you (describe services provided). On this basis, we agreed that you would pay your invoice n°XXXX amounting to X, before the MM/DD/YYYY. However, not having made this payment on time, I endeavored to contact you with a first reminder letter on the (date first reminder letter was sent). I also phoned you on the (date of call), in order to remind you of your obligations. 

Yet to date, we still haven’t received payment for invoice n°XXXX.

We remind you that the amount you owe has increased to X (initial invoice amount + potential late fees). 

Yet, facing financial commitments and obligations ourselves, we can’t wait any longer for this payment. 

Unless we receive the sum owed to our office by certified cheque, payable to (your name), within a period of X days from now, we will be left with no choice other than to pursue legal action against you, without further notice or delay. 

We sincerely hope we don’t have to resort to such measures. 

Best wishes, 

Your name
Signature 

 

 

If nothing comes of your attempts to get in touch, then you’re running out of options. We cover the actions you can take in more detail in our article Late Payment Of A Client Invoice: Five Actions To Take. Unfortunately, supplier-client relationships aren’t always simple. However, Kiwili can help you manage your client relationships, as our all-in-one software also functions as a CRM system. 

You might want to check out our post, Ground Rules For Getting Paid Quickly, coming soon to our blog! 

 

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