How To Write A Past Due Notice

 In Past Due

It can be very stressful when you rush to complete a job for a client only to wait months just to get paid. Getting paid on-time is crucial to the success of any business. Cash flow is what keeps business a float. If you’re not paid one-time, it can lead to financial difficulties for your business. When this happens it’s best to send a past due notice to your client.

Before the Past Due Notice

The first step to get paid for your services is to make sure that you send the invoice to your client as soon as services are completed. The sooner you send out an invoice, the faster you will get paid for your services.

If your client’s account is overdue, you should check to make sure that the details of the invoice are correct. You don’t want to make any errors that could lead to a dispute or further payment delays.

When to Send?

When to send the past due notice will depend on your current payment schedule. However, you could try out different schedules to see how your clients will respond to it.

One alternative is to send out payment reminders 7-15 days before the invoice is due. This is a simply a good gesture on your part to give your clients a heads up that their payment is due, in case they don’t remember.

After the first friendly reminder, the past due notice really should come more frequently at 30, 60, and 90 days. You are aware that the longer the delay in payment, the lower the probability that the bill will be paid. Stay current with the notifications on a monthly basis until it’s time for you to turn over the unpaid invoice to collections.

The Contents

Your collection reminders and past due notices should have all of the necessary information that your client should know, as it pertains to the overdue invoice.

• Original invoice number and date
• Amount due
• Reminder of the payment policy
• Summary of the account or the previous attempts to contact
• Call to action and instructions for next steps
• Link to payment options for email notices
• Your company’s contact information

1-15 Days Past Due

Dear John,

This is a courtesy reminder that your account is now past due. Based on our records, the total amount of $xx is now 7 days past due. In case you did not receive the invoice, an additional copy is attached and a summary of your account can be seen below.

  • Invoice Number:
  • Invoice Date:
  • Amount Due:
  • Due Date:

Your Payment can be made via check to the address listed below or through our website at www.ABC.com.

At the moment, our payment terms are 30 days from the date of issue with a late fee of 4% for any invoices outstanding after 45 days.

We value your attention to this matter and are looking forward to your prompt response and continued business

Sincerely,
John Smith
ABC Company
12 Smith Street
Small Town, NJ 12345

30-60 Days Past Due

As soon as you get past the second reminder, it’s time to incorporate a strong business tone to the notices. The notice should still be professional in nature. However, you want to let the recipient know that this is a serious matter.

Dear John,

This is to let you know that your account is now 60 day PAST DUE. Based on our records, the amount of $xx was due on March 10, 2016. We made an attempt to get in touch with you on March 24 and April 15. However, we never heard back from you.

This issue demands your immediate attention. Please remit payment on the following invoice at your earliest convenience

  • Invoice Number:
  • Invoice Date:
  • Amount:
  • Current Amount Due:
  • Due Date:

Based upon our contract, payment terms are 30 days from the date of issue. Your account has been charged with a late fee of 5%.

Please get in touch with us right away with the status of this payment. Payment can be made by check to the address listed below or through our website at www.ABC.com.

Sincerely,
John Smith
ABC Company
12 Main Street
Small Town, NJ 52521

90+ Days Past Due

This notice has gone beyond the reminder and serves to inform the customer that you will turn this account over to collections for payment. This should be one of the last notices seeking payment.

Dear John,

This is a serious matter that requires your immediate attention. Numerous attempts have been made to contact you regarding your account that is now beyond 90 DAYS OVERDUE.

If we don’t get the required payment within the next seven business days, we will be forced to take action and send your account to a collection agency.

Payment on the invoice below is due within the next 7 business days to avoid this course of action.

  • Invoice Number:
  • Invoice Date:
  • Amount:
  • Current Amount Due:
  • Due Date:

According to our contract, payment terms are 30 days from the date of issue. Your account has been charged with a late fee of 6%.

Please get in touch with us immediately with the status of this payment. You can make payment via check to the address listed below or through our website at www.ABC.com.

Sincerely,
John Smith
ABC Company
12 Main Street
Small Town, NJ 52521

Final Thoughts

You don’t ever want to be in the position where you are chasing your clients for money. You just need a contingency place on how to effectively deal with this issue. Sending paste due notice letters will definitely help you get paid nad improve the cash flow of your business.

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