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How to Write an Overdue Invoice Letter

Overdue invoice letters are an essential part of your A/R process. In a perfect world, you wouldn’t need to chase down clients, but having a structured outreach process remains a vital way to get paid what you’re owed.

We don’t need to stress the importance of maintaining a steady cash flow and managing relationships with your clients. Overdue accounts jeopardize both goals. Fortunately, it’s possible to create a system for managing delinquent accounts that preserves relationships while increasing your chances of getting paid faster.

What’s Included in an Overdue Invoice Letter?

Overdue invoice letters (also referred to as a “past-due reminder” or a “past-due account notice”) can take many forms, but generally, these will be template-based email forms you send clients at a predetermined point in the invoice cycle (either manually or through an automated A/R system).

These emails should contain the following information:

  • A reminder informing clients that their payment is past due
  • Accurate details: how much is owed, payment due dates, and available payment methods
  • Personalized language tailored to the situation

This is the standard type of past-due account notice. Most companies develop several templates tailored to the length of time the account is delinquent based on their accounts receivable aging reports

As client accounts start creeping into the 30-60 days and 90+ days-late categories, companies begin to shift their tone to sterner stuff. It’s a sad reality, but some clients will take a mile when you give them an inch. And gentle reminders may not be enough to encourage payment for chronically late clients.

Creating an Early-Stage Payment Past-Due Notice (1-15 Days)

When customers are only a few weeks overdue, your goal is to simply reach out to the clients and let them know that their payment is late. Their lateness could be the result of a simple clerical error or a new process they’re establishing internally, so there’s no need to get tough. Just remind them what they owe and trust that they’ll make good.

Creating a Middle Stage Payment Past-Due Notice (30-60 Days)

At this point, you’ve made contact at least once and still haven’t received payment. You now have some leeway to push them a little with a follow-up overdue invoice letter in which you stress the urgency of on-time payments. Let them know there may be ramifications for failure to pay, including ending services or referring their account to a collection agency.

Creating a Late-Stage Payment Past-Due Notice (90+ Days)

At this point, the client is well overdue and has received at least 2 communications from your collections team. At this point, it’s up to you to consider which actions to take.

Sadly, the longer it takes customers to pay, the less likely it is they’ll pay at all; continuing to provide services to these clients may be a poor decision. Let them know if payment isn’t remitted within a selected timeframe, you’ll be forced to turn their account over to a collection agency.

Your Free Past-Due Letter Template

If you’re struggling to find the words to create an overdue letter for a client, here’s a starter template. Just fill in your company details and you’ll be on your way:

Hello [company representative / client’s first name],

We hope your day is going well! We’re getting in touch to remind you that your most recent payment is overdue. 

According to our records, the following payments are past due:

Invoice #        Amount Owed         Due Date

We’d greatly appreciate you making a payment at your earliest convenience. If you need help making a payment or discussing payment options, we’d be happy to work with you! Contact our team at [Service Number] to discuss options.

Thank you!

[A/R Team Representative]

Outreach Timing Is Critical

Regardless of why customers may fail to pay on time, the timing of your outreach is essential. Customers may not realize they’re delinquent, and if so, quick outreach is the best way forward. If they do realize it, fast outreach indicates that you’re on top of your accounting processes and are aware of their delinquency.

Many companies still send these emails manually, but why rely on manual processes when your accounting platform can do the work for you? Automated A/R solutions can be set to send out dunning emails at predetermined points when payments aren’t received. It’s easy to upload your templates into the system. Automating outreach guarantees you’ll be quick to respond to any missed payments.

And at the end of the day, this simple solution can yield the biggest results for getting paid faster. Establish an automated system of communication, create unique templates for delinquent accounts, and be ready to work with your customers to find solutions. 

Gaviti has spent years developing automated A/R solutions that help our clients get paid faster. Contact us to learn more about our platform and see why so many companies are turning to a faster, more efficient system of accounts receivable management. 

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