Effective strategies for collecting past due invoices + email templates

A seamless cashflow is imperative for the smooth running of a business, but when clients delay invoices, it impedes trade operations. According to statistics, past due invoices have been a primary impediment to conducting business in the United Kingdom (UK).

Over the years, and with the steady rise of technology in the business landscape, company owners are turning to emails to remind clients to pay invoices. However, conveying such a message via email can be daunting because you must balance urgency and thoughtfulness. 

How can you ensure your invoices are paid on time and in full? 

Past due invoice: impact and meaning

A past due invoice is an unfulfilled invoice by the due date. While most people downplay the repercussions of unpaid invoices, its detriments can lead to business closure, especially for those depending on invoices to manage operational costs. 

A client’s unpaid invoice can create a feedback loop of surviving on minimum wage instead of using that time and resources to expand their business. Therefore, grasping the severity of past due invoices will help you craft effective strategies for late payments. 

Further, this post explains the best tips and strategies for collecting past due invoices.

Best strategies for collecting past due invoices

1. Set clear payment plans

You must draft a detailed payment plan to establish your client knows what they are working with and on. Emphasizing how and when you want them to disburse funds removes any uncertainty during payday. 

Also, ensure that you include any penalties, recurring or not, before settling on an agreement. Doing this certifies that your client understands the intricacies of working with you, thus hindering misunderstandings.

2. Ask for advance payment

Encourage your client (s) to pay part of the total funds before you start working with them. Doing this will cushion you if they delay your invoice and show their commitment to working with you. Moreover, asking for an advance fee allows you to learn about a new client’s payment habits, especially when working on delicate projects. 

3. Put reminders before the due date

Reminding your clients one or two weeks before the due invoice date is effective oozes friendliness and patience. If setting reminders is daunting, you can use automated invoice software.

4. Set a past due invoice reminder

When collecting an unpaid invoice, you must set reminders if the client does not meet their end of the contract. Note the reminder should be as non-confrontational as possible, outlining any penalties or late fees as indicated in the first agreement. 

5. Suggest different payment options

Offering multiple payment options to your clients is a proven method to curtail overdue invoices. You can opt for wire transfers, ACH, and debit cards for convenience. Doing this will disregard any late-payment excuses.

6. Use an invoicing software

Drafting invoices manually is a hurdle, especially if you lack the time and resources. However, invoicing software allows you to outline and track all your astounding invoices.

Tips for writing invoice reminders

1. Add the due date and invoice number on the subject line

Indicating the invoice number and due date on your email reminder ensures the client doesn’t bypass it. Denote the due date of the invoice and any penalties if they don’t keep their end of the agreement.

2. Attach the original invoice

Sometimes, clients have a hard time locating messages in their inbox. Therefore, you must resend the original invoice with any other crucial documentation regarding payment.

3. Keep a friendly tone

Drafting your email using a friendly tone builds trust between you and the recipient. Avoid using ambiguous, pushy, and threatening statements. Also, the email should be precise and to the point, ensure that you stay on topic.

4. Be factual

Your email should include factual details about the services offered, the start, and the due date. If your facts are not straight, the client could delay the invoice or not pay it at all, citing unclear communication and work ethics. Therefore, only enclose factual and verifiable statements to avoid unpaid invoices.

5. Send supporting documents

There might be a scenario where clients challenge payment plans and options to avoid paying for your service. To prevent this, it is crucial to send supporting paperwork, including any signed contract or order form, to serve as a stark reminder that they consented to any agreement. 

Useful email templates for collecting past due invoices

1. A friendly reminder email

Subject: Gentle reminder: past due invoice

Hi (Client’s name)

I hope you are well. As our long-standing client, we wanted to inform you that the invoice (invoice details, including due date) is overdue. We empathize that finances are a hurdle sometimes, and we are here to assist. 

Attached is the due invoice and agreed payment plan, which we hope you will fulfill soon. Kindly disregard this email if you already paid the invoice in full.

Thank you for taking the time to consider this matter.

Best regards,

(Your name)

(Your title)

(Your contact information)

2. An urgent action required email

Subject: Urgent action required

Hello (Client’s name)

I hope you are well. Following our last email, we noticed you have not paid your invoice (invoice details) and incurred costs (amounts). 

We hope you will address this matter soon for seamless service delivery. If you have any questions, reach out for clarity. We are here to assist. 

Sincerely,

(Your name)

(Your title)

(Your contact information)

3. Payment plan proposal email reminder

Subject: Flexible payment plans for (invoice details)

Hi (Client's name)

We understand any financial mishaps that you may be going through while paying invoices (invoice details). Due to this, we are open to discussing a flexible payment plan that doesn't leave you financially constrained. 

Let us know if this works for you to map a better way forward.

Warm regards,

(Your name)

(Your title)

(Your contact information)

4. A personalized approach email reminder 

Subject: Forging better collaboration on invoice (invoice details)

Hello (Client's name)

We wish to extend our appreciation for your efforts in building a cohesive partnership with (company name), as your support has been instrumental in solidifying our place in the business landscape.

Due to this, we request that you attend to the past due invoice (invoice details). In case of any hurdles in fulfilling this invoice, we ask that you reach out for further discussions.

Attached are the signed invoice and any other crucial paperwork regarding the project (project details).

Sincerely,

(Your name)

(Your title)

(Your contact information)

5. Late fee notice reminder email

Subject: Reminder unpaid invoice (invoice details)

Hello (Client's name)

We wish to inform you that you are yet to fulfill the invoice (invoice details). As detailed in the contract, overdue invoices attract penalties and fees. 

To avoid these, we request you pay at your earliest convenience. Total amount payable (indicate) by (due date).

Kind regards,

(Your name)

(Your title)

(Your contact information)

6. Diplomatic escalation email reminder

Subject: Urgent attention needed for invoice (invoice details)

Hi (Client's name)

I hope you are well. Unfortunately, the invoice (invoice details) is yet to be paid, notwithstanding the numerous emails we sent regarding the issue. 

However, we realize that unanticipated situations occur. With regards, we have drafted a flexible payment plan, hoping that you will attend to this matter on time.

Kindly reach out to us for clarity regarding the invoice.

(Your name)

(Your title)

(Your contact information)

7. The final demand email reminder

Subject: Final notice: call for immediate action

Dear (Client's name)

We regret to inform you that the invoice payment (invoice details) has not yet appeared on our account. Given that this is our final reminder, we must take further action to recover the amount. 

We pride ourselves in solving past due invoice issues amicably. Kindly cater to this issue as soon as possible.

Regards,

(Your name)

(Your title)

(Your contact information)

Email templates to sequence your past due invoice reminders

1. First collection email reminder

Dear (Client’s name)

Subject: Past due invoice

We want to notify you that you have yet to pay your invoice (invoice details), which is already overdue.

Attached are relevant details about the contract; revise them at your earliest convenience. We offer flexible payment options, including credit cards and EFTs. 

Below are details of all our payment options 

(List below)

Do not hesitate to reach out for assistance.

Yours,

(Your name)

(Your title)

(Your contact information)

2. The second collection email reminder

Subject: Past due invoice: immediate action needed

Hello (Client name)

This is a follow-up email regarding the unpaid invoice as detailed in our last email with the subject (add details). It has been two weeks since we last contacted you to repay the invoice (invoice details).

Attached below are all the invoices for the services we negotiated. We understand that the financial constraints occur unexpectedly. However, we would appreciate a timely address of this issue.

Payment options

(List below)

Contact (list contact) if you encounter any hurdles while paying.

Kind regards,

(Your name)

(Your title)

(Your contact information)

3. Third collection email reminder

Subject: On hold credit status

Dear (Client’s name)

We are yet to receive any funds from the invoice (invoice details), and our communication efforts have proved futile. If you have made any payments, kindly inform us to settle this matter ASAP. 

The signed contract stated that you would incur penalties and fees in the event of late payments. To this effect, and having contacted relevant offices, we regret to inform you that your credit status is on hold until you pay all the astounding fees.

Failure to do this will have us introduce a third party to pursue the issue further.

Warm regards,

(Your name)

(Your title)

(Your contact information)

What to do if the client fails to honor your email reminders? 

Occasionally, clients fail to meet their end of the contract due to financial constraints. However, when your efforts to reach them prove futile, it is best to do either of the following:

Send a debt collection letter

A DCL (debt collection letter) is more formal and lets the client know that you have opted to seek other options regarding past due invoice. Your debt collection letter must include this information:

• The time limit for paying the overdue invoice
• The final and definitive payment date
• Acceptable modes of payment
• A call to action if payment is not received by the deadline

Note: your CTA (call to action) statement should be vague but weighty, indicating that you will employ strict measures if they fail to pay.

Hire a debt collector

Find a debt collector to handle the past due invoice on your behalf. By doing this, you focus more on your business and other tasks. Also, debt collectors charge a percentage of the total funds as compensation. 

Take your case to a small claims court

You can take your client to court if they fail to pay an invoice. For this, prepare all the contract documents since they are crucial for developing a case against the client. 

File a complaint in your industry

The United States has many commissions or bodies that offer services to those who want to address their overdue invoices. As much as they don’t go after the clients, their advice plays a crucial role in the invoice collection process.

File a civil lawsuit

If the client owes you more than $25,000, it is advisable to file a civil lawsuit. In your claim, you will state that the client did not pay the invoice, even after sending them numerous emails. And to this, you want the judge to award you the total amount owed. 

You can hire an attorney to help you pilot the minutiae of the law to help you stay on course and represent you in court. Note that often, the defendant will agree to settle the past due invoice out of court.