It’s not unusual for a client to fall behind on an invoice from time to time. But because receivables management is key to your business’s cash flow , is critical. When a non-payment happens, correctly communicating with clients about their past-due invoices is imperative.
Because you want to receive payment and maintain a positive business relationship with your clients, your communications about past-due invoices must be handled professionally and with care. First, before you contact a client about a past-due invoice, check your records to be sure you haven’t made a mistake or received payment. Then, if you have a true past-due invoice, it’s time to reach out to your client.
Experts agree that communicating about past-due invoices should happen early in the process (just 14 days past the payment due date). To make this process easier, make sure you have a specific invoice reminder plan in place, which would begin with a phone call or email once the invoice is 14 days past due. In that phone call or email, give your customer the benefit of the doubt. Use a friendly and helpful tone and ask to be sure the customer has received the invoice.
If a phone call or email does not receive a response, it will be time to use an established library of debt collection letter templates that you can easily customize and mail. Read further for letter templates you can use.
How Do You Write an Effective Debt Collection Letter?
You want your debt collection letters to accomplish two goals: get payment and maintain good customer relations. With those goals in mind, any accounts receivable collection letter you send should be respectful, concise and specific. While follow-up letters to a debtor requesting payment will gradually be firmer in tone, each should contain the following information.
- Paragraph 1: In one sentence, explain that you are writing about a past-due invoice.
- Paragraph 2: In bullet points, summarize the details of the past-due invoice, including invoice tracking number, the principal amount, any interest or fees and a description of what the original balance is for—including dates and locations.
- Paragraph 3: In one sentence, thank the recipient for swift payment or a call to discuss terms.
- Signature: Add your signature.
- Letterhead: Write the letter on your company letterhead and be sure all contact information is evident.
For help with debt collection letters, explore our library of accounts receivable collection letter templates.