How to Write an Overdue Invoice Letter w/ Samples
January 09, 2023
If you’ve stumbled upon this article, the chances are that you are having trouble receiving payments on time.
As a business owner, you have to recognize that there is always a chance that a client will pay you late. So even though that might be frustrating, you should try to figure out what's wrong and how to fix it.
This is when overdue invoice letters come in handy. An overdue invoice letter is a key document that’s used for addressing late payments. If you want to learn how to write one, you’ve come to the right place!
This article will tell you all about invoice letters and show you how to create them hassle-free! So, read on!
What is an Overdue Invoice Letter?
An overdue invoice letter is a letter that addresses a past-due payment. After the due date has passed, the vendor sends it to the client to remind them to pay.
As a vendor, you might want to wait a few days after the payment due date to write and send this letter, but it's also a good idea to do it the next day because you never know why the payment is late.
Should You Send an Overdue Invoice Letter?
The answer is yes. You should send a letter about an unpaid invoice. Even though it might be hard, that's the best thing for you and your business.
You should get paid for your work, and sending a letter to the clients is one way to move toward that goal.
Also, you don't know why the payment was late. The reasons can be as simple as the client forgetting or as serious as the client having money problems. Either way, the sooner you find out, the better decisions you can make for your business.
Overdue Invoice Letter Tone–It Matters!
While working on an unpaid invoice letter, you should consider the tone.
Make sure that the tone of the letter is friendly rather than aggressive. So, use phrases like "we would appreciate it if you could..." and "thank you for helping us with..." instead of "we tried to get in touch with you several times..." and "we require you to..."
The tone of the letter matters greatly when it comes to creating a positive customer experience. Based on the statistics, if a client has a bad experience with a vendor, 80% of them are likely to end their contract with that vendor. So, if you want to keep your customers and grow your business, use a friendly tone in your overdue invoice letter.
What Should Overdue Invoice Letter Contain?
Now that you know what an overdue invoice letter is and how important the tone of the letter is, let's look at what should be in one.
- The reason for contacting the client. The first thing you should do is make it clear why you're getting in touch with them. Of course, it is to get the past-due payment, but the client might not see it that way.
- Overdue invoice details. In the letter, you should also include details about the overdue invoice. You can list the invoice number, the invoice due date as well as the date it was issued, some information about the service, the total amount owed, and the payment terms.
- Offer to resend the invoice and answer any questions. You can offer to send them the overdue invoice again if they want to be reminded of what they have to pay for. You can also offer to answer any questions they might have, which will make things easier for both of you.
Tips For Writing & Sending Overdue Invoice Letters
Before you start writing and sending letters about late payments, think about these tips to make the process easier.
#1. Do it in a Timely Manner
Don't wait days or weeks for the client to pay you if your payment is late. Most likely, they have either forgotten or are having trouble with money.
It is always a good idea to send an overdue invoice letter within the first 24 hours of not receiving the payment. This way, you can make sure to get the right information at the right time, which will ultimately help you make smarter business decisions.
#2. Keep it Professional
It can be frustrating to deal with late payments, but try to stay professional. You don't want your feelings to get the best of you and make things even worse.
Make sure your letter is friendly, because being aggressive will only make it harder to work around the issue with your clients.
#3. Make it Easy For Clients to Pay
There is always a good chance that the payment will be late because the client had trouble with one of the listed payment methods. Either they couldn't figure out how to work with them or it took a lot more time than anticipated to make a payment.
Giving your customers more than one way to pay makes it more likely that one of the methods will work without any issues. So, make sure to accept as many payment methods as you can, such as Skrill, PayPal, Wise, credit and debit cards, bank transfers, etc.
#4. Demonstrate Urgency
Even though your letter should have a friendly tone, it's not a bad idea to show that it's important to make a payment on time.
After all, you need that money to pay for things like operating costs and keep your business going. So, you can emphasize how important it is to get money as soon as possible without being rude.
#5. Follow up Via Phone
You can also call your clients in addition to writing them a letter.
Some people might find it easier to talk things out over the phone. It saves time, helps solve the problem quickly, and gives both sides a chance to figure out what's going on and come up with solutions together.
#6. Be Brief
Try to be brief in both the letter and the phone call. You don't want to waste time on details that aren't important and could make things worse.
Just focus on the most important things, like why the payment is late, when it's due, and so on.
Invoice Has Not Been Paid After Multiple Letters
You've written your client several letters and even called them to talk about the problem, but nothing has worked. You still haven't received the payment.
So, what should you do if you find yourself in the same situation? Well, there are a few things you can try.
- Create a payment plan. You can set up a payment plan for your clients. You don't have to ask them to pay the whole amount at once. Instead, you can break it up into a few payments that can be made over a few weeks. Your willingness to work with them should make them more inclined to find a way around the problem and deliver the payment as agreed.
- Hire a debt collector agency. If all of your efforts to obtain payment fail, you can hire a debt collection agency to handle the situation. The agency will contact the client and use various methods to get the payment. This may not be the ideal form of intervention, but at least the issue will be off your hands for a little while.
- Turn to legal action. If all else fails, the last thing to do would be to hire a prosecutor and consult with them about the problem. You can file a complaint or even take your client to court based on what the prosecutor says. But think about all the costs of going to court because you don't want to go bankrupt over a small amount you are owed.
At the end of the day, receiving late payments is inevitable, whether you’re a contractor, freelancer, or business owner. Hopefully, this article has shown you how to go about the problem and use overdue invoice letters to receive the money you are owed on time.
- An overdue invoice letter is sent to the client when the payment is late if you want to get the money you are owed.
- You should keep up a friendly tone throughout the overdue invoice letter. Getting angry with the client will only make it harder to reach a deal.
- An overdue invoice letter should explain why it's being sent, give details about the invoice, offer to send it again, and answer any questions the client might have.
- You should send the letter on time, keep it short and professional, show that it's important, and give people more than one way to pay.
- If your overdue invoice letters don't work, you can set up a payment plan or hire a company that collects debts. If things get really bad, you can take legal action.