Payment Reminder Templates to Ask for Overdue Payments Professionally
Payment Reminder Templates to Ask Customers For Overdue Payments
Optimizing a business’s finances is no easy task. Business owners, at some point, have to decide and streamline their finances in an organized way. Such an advanced organization is only possible by closely monitoring and optimizing the operations of a business’s finance department.
Most businesses have already mastered the art of creating invoices and sending them to their customers with zero delays. However, you are always going to find customers who are unable to pay their invoices on time. This is bound to happen even if you have a 100% deliverability rate for your invoices.
Even with past experience, many businesses are still unsure about their approach to overdue payments. Creating and sending payment reminders is perhaps the most challenging thing for many businesses because they are unsure how they should approach it.
Businesses, particularly smaller ones, tend to avoid confrontation when a customer has overdue payments. Taking such an approach for your business can turn out to be disastrous. At the same time, you can not sound too harsh or pushy when sending a payment reminder.
It is crucial to remember that getting paid for your work/product goes hand in hand with customer satisfaction. Therefore, you need to strike the right balance between being polite and assertive. The simplest solution is to find an overdue payment reminder letter template that works for your business.
Check whether you have access to a reminder letter for payment collection that has delivered the desired results in the past. This allows you to bypass any guesswork. Additionally, you can avoid wasting your valuable resources on overdue payment reminders that may or may not work.
This article introduces 5 payment due reminder templates that can be used by professionals in different industry verticals. Having access to five different overdue payment reminder letter templates can give you more control over your communications.
Using a well-drafted payment reminder email/letter template can help you push customers to pay their due on time. You can even appeal to your customers on the red-alert status and get them to make their overdue payments.
Furthermore, the article also introduces alternatives you can use for your payment reminder letters/emails. The article further goes on to explain how businesses can make use of online and offline channels to avoid issues like overdue payments.
Closely examining the five payment reminder templates listed below can help businesses come up with their own unique payment reminders. Furthermore, personalizing them with unique elements relevant to your business can connect better with the customer base and encourage on-time payments.
How to Ask Customers For Overdue Payments
Ideally, a customer should send their overdue payment as soon as they receive their invoice. But, ideal situations hardly exist in the real world, and at least some of your customers are bound to make a late payment. Hence, businesses have no reason to avoid reminder letters for payment collection.
Businesses or individuals should not sit around waiting for their payment to be credited even after completing the job. Businesses must never encourage late payments by not following up with customers on their payment dues. The reluctance to send payment reminders can even lead to your business incurring unnecessary losses.
Hence, businesses must take the initiative and send the first follow-up mail a week before the payment is due. In many cases, the customer often forgets about the payment, and all they need is a gentle reminder. But, that’s not necessarily the case for every customer.
So, you must continue sending the follow-up mails right until you receive your bill payments. We realize that asking for overdue payments can be tricky. However, even a slight change in your tone can leave a lasting impression on the customer.
Furthermore, you may also have to change your tone depending on how late the payment is from the customer.
5 Gentle Late Payment Reminder Templates
The past-due reminder letter template we discuss below can help you create an ideal payment reminder template for your niche. However, it is vital that you personalize your mail so that it can truly connect with the recipient and generate a response from them.
Initial Payment Reminder
The initial payment reminder is typically sent one week before the due date. This is one of the most important payment reminders. A major part of your overdue payments is not intentional. In many cases, the customer simply forgets to make their payments.
Therefore, using an initial payment reminder could significantly bring down your business’s payment overdue rate. In addition, the initial payment reminder encourages your customers to make timely payments and avoid outstanding payments.
Below is a notice of payment due template that you can use to remind the customer about their payment due.
Hey James Smith,
I hope you are doing well. I am sending this email/letter to remind you that the payment for May 2023 (invoice #007) will be due next week.
I understand that you may have a lot on your plate at the moment. However, I hope that you can find a moment of your time to go through the invoice whenever you can. I am always available in case you have any questions.
Thank you!
Jessica Johnson
Things to Note
When preparing the initial reminder letter for payment collection for your business, there are a few things that you should keep in mind. Below are some basic guidelines you can follow to create a well-drafted payment-due template for your business.
Keep it Short And Concise
When composing an initial payment reminder email or mail, try to be short and concise. You need not stretch your message so much because the only aim of the email/mail is to remind the customer. If the customer makes regular payments, seeing or reading the subject line is enough.
Keep it Friendly And Informative
Initial payment reminder email/mail is that they are sent to customers who have not yet missed the due date. Therefore, the customer has no wrong on their part at this stage in the payment process. Coming across as pushy is not the impression you want to create.
In fact, you don’t even have to request the payment in your initial payment reminder. Remember, the only purpose of the mail is to serve as a reminder and to let the customer know that you’re keeping track of their invoices.
You should also make it a point to provide all the necessary information in the payment reminder mail. Keep the reminder informative so that the customer knows for which month the payment is due. Furthermore, it would be best to include additional details like the invoice number in your reminder.
Second Payment Reminder
There are many people who have a habit of procrastinating and waiting till the last moment to pay off their bills. The second payment reminder is typically sent to the customers on the day the payment is due. Therefore, this email/mail acts as a final reminder to the customer to make their payment.
Neither the business nor its customer likes to have overdue payments. The customers who either forgot or were lazy to make the payment are likely to do it once they receive the second payment reminder. So, unless the payment is delayed deliberately, this reminder should suffice for the customers to make the payment.
Below, we look at the past-due reminder letter template you can use for the second payment reminder.
Hey James Smith,
This mail is to remind you that payment on invoice #007 for the total amount of $1300 dated May 13th is due today. I request you to please make your payment to the bank account specified on the invoice.
Please reach out to me whenever you want regarding any questions concerning the invoice. I’d be more than happy to clarify all your questions.
Thank you!
Jessica Johnson
Things to Note
Give Attention to The CTA
The second payment reminder mail is probably one of the most important ones in the whole sequence. This is the first communication in which you actually appeal to the customer to make their payment. Again, ensure that the CTA catches the customer’s attention and knows the due date is already up.
Maintain a Calm and Polite Tone
Similar to the initial payment reminder mail, the second payment reminder must also have a calm and polite tone. The significant difference between the two is that the latter actually requests the customer to make the payment.
Technically, the customer still has enough time to make the bill payment even after receiving the second payment reminder. Chances are that the customers either forgot about the payment dues or mistakenly thought that they did make the payment.
Even if the payment is delayed due to other reasons like lack of funds, there is no way for the seller to know that. So, at this point, the best course of action is to remain calm and courteous in your communication with the customers.
Third Payment Reminder
The third payment reminder is usually sent to the customer after one week since the late payment was due. Technically, this is the first payment reminder sent to the customer after their payments become overdue.
The one-week overdue payment reminder is ideal for reminding the customers who were unable to pay their dues on time. The chances are that your customer may have some genuine reasons for missing out on the due date. These reasons could include a temporary shortage of funds, slow in-house processing, technical issues, family or health emergencies, and so on.
The third payment reminder shows your customers that you are keeping track of their payments. Such reminders also help to speed up payment processing that may be held up because of any in-house issues.
Hi James Smith,
It has come to my attention that you have missed the bill payment of $1300 for invoice #007 dated May 13th. I would like to inform you that the payment is overdue by one week. Therefore, I request you to check this out from your end and get back to me.
Please disregard this mail, if you have already made the payment. It would be wise to let me know if there is any help you need with the invoice processing. And in case you have lost or not received the invoice, I’d be more than happy to send you a new copy.
Thanks,
Jessica Johnson
Things to Note
Use a Slightly More Firm And Urgent Tone
When it comes to the third payment reminder mail, you can start to gradually firm your tone. At this stage, the customer already has an overdue payment to be made.
In other words, the customer owes you or your business money. However, it does not mean that you can stop being courteous in your communication.
Include More Details
While the best approach to drafting a mail is to make it short and concise, you’d still need to include more details in this mail. Try including all the main information in your mail, such as the invoice number, the amount due, repayment deadline, etc.
Providing these details helps you get the message across to the customer more clearly. This also provides all the necessary details of the invoice. Furthermore, you should also offer a copy of the invoice as the customer may no longer have it with them.
Including more details in your fourth payment reminder is also a great way to show the customers that you are keeping close track of their payments. Furthermore, once the customer is aware that you are monitoring their payment activities they are less likely to raise any false claims to avoid payments.
Fourth Payment Reminder
If the customer doesn’t make the payment even after two weeks since the payment was due, then you can send them a new reminder mail. This would be the fourth reminder mail that you send to the customer. The fourth reminder mail is an important one because, at this point, your business is practically incurring loss due to non-payment. In this case, there is a sense of urgency for getting the overdue payment from the customer as it can directly affect your business.
So, the messaging in your fourth payment reminder mail must be such that it conveys your business’s urgency for the overdue payments. And although you can be sterner in your communication, you still have to maintain professional etiquette.
Given below is a late payment reminder template that you can use to create your own fourth payment reminder mail to the customers.
Hi James Smith,
I am writing to you regarding your overdue payment of $1300 for invoice #007. I would like to remind you again that your payment for the invoice mentioned above is outstanding for more than two weeks now.
If you have any questions regarding the invoice, please let me know, and I will clarify it for you. I am also attaching a copy of the invoice along with this mail if you no longer have the invoice with you.
I request you to please reply to this mail and let me know that you have received the message.
Regards,
Jessica Johnson
Things to Note
Use a Firm Tone
Once you reach the fourth payment reminder, it is time for you to take a more direct approach. You must be more firm in your communication and clearly state the purpose of your reminder mail. This means that you can ask for the payment directly from the customer.
It is best to be straightforward in your fourth payment reminder. Mention that you have tried multiple times to reach out to the customer regarding their bill payment. Though you should be bold, you must not go overboard and make the message seem apathetic.
Ask Confirmation For Message Received
Always make sure that your fourth payment reminder mail asks for a confirmation from the customer. You need to ensure that the message is received and acknowledged by the customer. All the customer is required to do is reply to your mail.
If they respond, you can at least cross out the excuse that the customer did not know about the overdue payment. In case the customer does not respond, there are two possibilities that you can consider. One is that the customer has not received any of the reminders that you sent or they are conveniently ignoring them.
Fifth or Final Payment Reminder
Your fifth payment reminder is the final reminder to the customers who still haven’t paid their overdue payments. The final payment reminder is sent to the customer only after one whole month after the date payment was due.
As you may have already figured out, the final payment reminder is your business’s last attempt to get the overdue payments. Hence, your urgency must be reflected in the payment reminder. Furthermore, you must also include every piece of information relevant to the purchase in this mail.
In comparison to the other payment reminders, the fifth or final payment reminder is typically lengthier. However, you must remember that despite the relatively elaborate nature of the final payment reminder you must still try to keep it as short as possible.
Given below is the outstanding invoice letter template that you can use to draft a well-made final payment reminder email/mail.
Hi James Smith,
This mail is yet another reminder to let you know that I have still not received the $1300 you owe on invoice #007. In addition, I would like to inform you that as per the company policy, I will be forced to charge you additional interest if the overdue amount is not paid within 30 days past its due date.
I request you again that you reach out to me if you have any questions on this matter. I’d be more than happy to clear up any confusion you may have regarding the invoice and its payment. If there are no concerns regarding the invoice, I request you settle this invoice as soon as possible.
Kind regards,
Jessica Johnson
Things to Note
Use a Tough And Firm Tone for Communication
Once you have reached the final stage of sending payment reminders, you are no longer obliged to maintain a soft tone. Furthermore, you should also consider the fact that the overdue payment is for a whole month.
At this point, you would have already made multiple attempts to reach out to the customer. Therefore, it is expected of you to take a stricter stand to claim the overdue payments. However, that does not mean that your payment reminders can have an accusatory tone.
It is also in the best interest of your business to maintain professionalism when it comes to communication even at this stage.
Reasons Why Your Payment Reminder Email Is Not Working
Most of the time, the customers make overdue payments within a month or after the final payment reminder. But, there is no guarantee that the customer is going to clear their overdue payment email just because you send them reminders.
So, if the customer does not make the payment even after a whole month then you should try alternative ways to reach them. here are several ways for you to reach out to the customer, and we shall discuss them later on. But, before you proceed, you need to ask yourself why the customer hasn’t yet responded to your reminders.
Now let’s explain the probable reasons why your payment reminder emails may not have got the results that you wanted.
Payment Reminder Emails Not Received
One of the reasons why your payment reminder did not receive a response could be that the customer never got them. However, it is not likely to happen unless you have the wrong email address.
If in case the customer did not receive them because you sent the payment reminder to the email mailing address then the customer can not be held responsible. And even though the customer is bound to remit the overdue payment, you may have to grant the customer an extension on the due date.
Another possible explanation for the customer not receiving the payment reminders is that your mail went to spam. It is not rare for business emails to go to the spam folder. This is especially true if you use the same email address for marketing purposes.
Most customers do not bother to check their spam folder unless they are specifically looking for an email. Avoiding your emails from being sent to the spam folder can be a bit tricky. You can start by tracking your emails.
You can check whether your email got delivered and whether the customer opened it or not. Effectively tracking your email’s deliverability, open rate, etc, reveals whether your payment reminder mail reaches your customers.
Once you have data on who received the email, who all opened the, and who all didn’t you can figure out who all are deliberately avoiding the overdue payments. Closely assessing the email delivery and open rate can also help you understand which of the customers do not use their emails. You can then use alternative communication channels like direct mail to communicate with such customers.
New or Changed Email Address
Another reason why your customers don’t respond to your payment reminder mail could be that the customer changed their email address. It is not unusual to see people change their email addresses. Many people change or abandon their email addresses if they start to get filled up with marketing emails.
Similarly, some users tend to start a whole new email account simply because they can’t remember the password of the old one. Moreover, the email addresses are easy to create. Therefore, there is hardly any reason for the customer to hold on to the old email address.
The only viable solution to this problem is to make sure that the email address that you have is right. You can even give your customers a quick call to check whether you can send payment reminder emails to the given address.
Wrong Person or Department
If your customer is a large institution, it is unlikely to not get any form of response for your payment reminders. In this case, it is most probable that the payment reminder email was either sent to the wrong person or department.
It means you can reach out to their business and check whether you have the right contact for sending payment reminders. It is also worth keeping in mind that different institutions have different workflows. Therefore, you must double-check whether your contact is responsible for bill payments.
Large institutions or companies generally tend to make timely payments. Generally, any payment overdue from a large institution is caused a problem in their in-house payment processing system. However, sending a payment reminder usually speeds up the process and the payment is made without any major delays.
But, if the payment reminders do not reach the appropriate authority responsible for making the payment then the chance of overdue payment shoots up. Companies can employ direct mail payment reminders to ensure the payment reminder is delivered to the right person using systems like PostGrid.
How Can You Prevent Late Payments?
They say, “prevention is better than cure” and it couldn’t be more apt when talking about business-related payments. Your priority should always be to prevent late payments rather than chasing down your customers for the payments.
Even if you are equipped with outstanding invoice letter templates, you shouldn’t have to use them unless necessary. Furthermore, most businesses feel sending back-to-back reminders is somewhat discomforting. This is true not just for the sender but also for the recipient.
You should try to find out ways through which you can encourage your customers to make payments before the due date. Some of the tactics you can use for encouraging early payments include rewarding early payments with discounts and charging a fine for late payments
Below we explain some guidelines that you can follow for invoicing that can help you avoid late payments at a much early stage.
Be Straightforward
The best approach for preparing your invoice is to just be honest and straightforward with your customers. On the other hand, you must still remain gentle while you educate your customers about the terms or repayment. Furthermore, you must do this before or at the latest right after the purchase.
The timing is crucial when it comes to invoicing because you can not afford to leave things to chance. Your customer must have the choice to read and understand your repayment terms. This means that the repayment terms must be clearly mentioned on the first invoice you send to the customer.
When mentioning the payment terms and conditions in the invoice, you should use clear and concise language to minimize confusion. You can also use a point-to-point to ensure that the customer does not miss out on any important details in the invoice.
Be Clear and Concise About The Time Frame
If you aim to avoid late payments, it makes perfect sense to be clear and concise about your time frame. So, a rule of thumb you can follow is never to go with repayment terms like “Due upon receipt.” Using vague terms would only help to confuse the customer further and you do not want that.
“Due upon receipt” is a vague term, there is a good chance that the customer may interpret it in a wrong way. This can only lead to more confusion and potentially slow down your bill payment. Therefore, you must always clearly state the due date for the payment.
Extra Charge For Late Payments
One of the most simple yet effective ways to avoid late payments is to charge interest for late payments. No one wants to pay extra money for a product or service simply because they could not make payment in time. Therefore, charging interest for late payments is surprisingly more effective than you might think.
However, you must make it a point to disclose this information to the customers before the actual purchase. It is vital that the customer knows all the details they need to know about the interest levied on late payments.
Furthermore, your invoice must explicitly mention the interest charges and explain the terms of the interest. This way, you have solid proof that the customer was informed that they would be charged interest in case of late payments.
Transparency is given priority by all customers regardless of which industry vertical they belong to and this must be always kept in mind when you write an invoice. You must specifically mention the charges and their clauses so that the customer can understand exactly what they are paying for.
Determine Your Late Payment Charges
You should be extra careful when it comes to late payment charges because excessive late payment charges can scare away prospects. On the other hand, if the late payment charge is too low, then the customer would not feel motivated to make on-time payments.
The secret to using late payment charges effectively is to find that sweet spot between too high and too low. Once you have managed to find the right late payment charge it becomes easier to persuade the customer into making on-time payments.
The best thing you can do is to read up on best practices in finance charging. You should focus your attention on payment charging aligned to your industry vertical. Examining your competitor’s invoice can also help you decide on the late payment charges for your business.
Timely Delivery of Invoices & Discounts For Early Payments
The timely delivery of your invoices increases the time gap between the invoice date and the payment deadline. So, the rule of thumb is to always deliver the invoice as soon as a job or product is delivered to the customer.
Your customers are more likely to make the payment on time when your product/service is fresh in their minds. Apart from this, you can also try offering discounts for customers who are ready to make an early payment. Even offering a very small discount for early payments can considerably reduce late payments.
More Ways To Send Payment Reminders
We have already discussed the payment reminder templates that can be used for drafting a convincing reminder. But, as we have mentioned before, there is no guarantee that the payment reminder email would work the way you want it.
You must consider the possibility that the payment reminders your send may not reach the customer. And regardless of whose mistake it is businesses must have a backup plan to ensure that their customers are informed about their payment dues.
Therefore you must try diversifying how you send payment reminders to your customers. Below we have discussed some additional ways you can send payment reminders to your customers.
Phone Calls
Typically, businesses don’t set payment reminders to be carried out via phone calls unless the payment is late by a month or more. Phone calls are not preferred as an alternative to payment reminder emails.
Phone calls are not ideal for regular interaction with customers as they might end up interrupting the customers’ lives. As a result, the customer may resent having to deal with your phone calls. This is why most companies only resort to phone calls only when they have to.
However, if the customer does not reply to any of your payment reminder emails, you must consider the possibility of them not receiving the reminders. At this point, the only viable approach is to make the phone call and remind the customer about the overdue payments.
Despite the many downsides of using phone calls as payment reminders, they are one of the most effective ways to ensure that your message is conveyed to the customer. And unlike emails or direct mails, you can personally verify that the customer gets the message in real-time using phone calls.
Direct Mails
Payment reminders may seem more convenient via emails but many businesses still send their payment reminders via direct mail. Direct mail was replaced as the preferred payment reminder method by businesses because they found emails more convenient.
Despite being one of the oldest communication channels in the world today, many businesses still continue to use direct mail for marketing. Why? Because direct mail has a much higher chance of getting a response from the recipients.
With fully automated direct mail systems like PostGrid available in the market, direct mail has once again gained popularity. New and advanced direct mail solutions rectify every issue originally faced by businesses employing direct mail.
Advanced address verification capability ensures that the invoice address is real and deliverable by the USPS. This way, you can ensure that the invoice always reaches the customer and without any unnecessary delays.
Integrating an advanced address verification tool like PostGrid also allows you to access advanced features like Address Autocomplete. This feature enables you to ensure the accuracy of address data right at the point of the collection which is typically your website or landing page.
Interestingly, you can even make use of advanced features like Address Autocomplete to ensure the accuracy of data right from its point of collection. Integrating an address verification API like PostGrid enables you to set up the Address Autocomplete feature on your website as well as landing pages.
Furthermore, the entire direct mail process including personalization, printing, and mailing can be easily automated using a simple API tool. Additionally, direct mail is more effective in generating a response from the recipient making it the ideal payment reminder channel.
Conclusion
Payment overdue is one of the biggest challenges every business has to face at one point or another. It can be frustrating for business owners to deal with payment overdue. Thankfully, there are ways to minimize payment overdue and ensure that you are compensated for your hard work.
Payment reminders are a vital part of business operations as they can significantly help you ensure timely payments from your customers. Email and direct mail payment reminders are two of the most effective ways to avoid overdue charges.
Moreover, you can use a late payment reminder template and modify it to draft the ideal payment reminder for your unique business. Email is the preferred method for sending payment reminders because it’s more affordable. At the same time, direct mails have a much higher response rate than email.
Powerful direct mail automation tools like PostGrid, enable you to automate your invoicing and payment reminder processes. Furthermore, you no longer have to worry about your payment reminder not reaching the customers because PostGrid comes equipped with an address verification feature.
The address verification feature of PostGrid is so robust that you can bulk verify addresses in a single go using a simple CSV file. PostGrid’s address verification process ensures that an address is real and deliverable by the USPS.
Features such as address verification and standardization ensure that the mail is delivered as early as possible. Furthermore, the timely delivery of invoices and payment reminders helps you minimize the chance of overdue payments.
Payment reminders sent via emails have a higher chance of getting ignored. Whereas direct mail comes with a much higher chance of generating a response, and its deliverability can be ensured with address verification.
It is high time businesses diversify the channels they employ for sending payment reminders to their customers. Direct mail could be the best channel for sending payment reminders as long as you employ advanced tools like PostGrid. This way, you can ensure the deliverability of your payment reminders and boost the response rate significantly.
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