6 Tips to Write a Friendly Overdue Invoice Letter

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Your customers are human, and sometimes they forget to pay on time. Even if you’ve kept up with collections and courtesy letters for payment, you’re likely to have past due accounts sometimes. Which means that you’ll eventually have to write an overdue invoice letter.

In this blog post, you’ll see strategies for crafting your initial past due letter as well as accounts that are severely past due. Whatever the reasons, if your business invoices customers, you’re likely to need to issue some late payment notices.

Language for Initial Overdue Invoice Letter

When crafting an initial overdue invoice letter for your business, keep the tone friendly. Avoid harsh language like “immediate attention” or “serious consideration.” Hopefully it won’t come to that point, and it certainly hasn’t yet.

For now, keep your word choice amicable. You want to avoid insulting or shaming them for not paying you. Assume the payment oversight was an honest mistake, because it probably was. Try phrases like:

  • This is a friendly reminder
  • Please bring your account current
  • Please bring your account up to date
  • If you have already sent us your payment
  • Thank you for your prompt attention to this matter

Remember, this is likely an honest mistake. Make an attempt to bring the account up to date without jeopardizing the customer relationship in your overdue invoice letter, but also be firm.

Include All the Details

If you’re missing a payment from a client who usually pays on time, it’s possible that your initial invoice or reminder simply got lost in the shuffle. That means you should always include all of the details from the invoice in your reminder letter, so they don’t have to hunt for the original copy:

  • Invoice number
  • Original Invoice Date
  • Payment Due Date
  • Payment Amount
  • Description

These details can appear in paragraph form or in a table, but either way, they should appear in the overdue invoice letter exactly as they did in the original invoice.

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Use Your Point Person

When you set up your original contract, you should designate who your contact at the organization will be. When mailing the letter, address the reminder to this specific person, not just the company. If the business manager’s name is at the top of the letter, she is more likely to tend to it immediately. If you are sending the letter in email form, send it to the person who can actually cut the check or authorize the payment.

The fewer hands the invoice has to be passed through at your client’s organization, the sooner you will receive your payment.

Document Overdue Letters and Messages

In some cases, a courtesy reminder for payment will be the first in a longer battle to bring an account up to date.

For this reason, you should document any correspondence regarding the overdue invoice amount. Make sure to keep track of where you sent the reminder letter, to whom you addressed it, and when you sent it. If you’re using email correspondence or a system that automates reminders, note whether or not the message was opened.

Be Brief

As always, the goal is to get the payment in your door. Avoid flowery language or apologizing for bothering them. Include the important details, request the payment, and move forward.
You deserve to be paid, and you deserve to be paid on time. If your clients know payment is a priority for you, it will become a priority for them, too.

Severely Past Due Accounts

Perhaps you’ve tried a 30 day past due letter, a 60 day collection letter, and multiple courtesy calls about a delinquent account. At this point, it’s time to be a bit more forceful.

Your next written communication should include:

  • Invoice dates and details
  • Previous attempts to collect
  • Actions you will take if the account is not paid within a specific time frame
  • Payment options

Finally, follow through on those actions. If you’ve warned of a credit hold, place the customer on a credit hold. If they miss the deadline for sending them to a collections agency, it’s time to follow through on that.

Unfortunately, collecting on past due accounts is inevitable for many small businesses. And while these strategies are your most effective way to deal with it after the fact, you should try to minimize collections issues with an effective invoicing strategy up front.

With all this in mind, check out some examples of invoice letter templates from FreshBooks, and tailor them to your needs.

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