Anyone who extends credit or loans money should put the terms of repayment in writing and have the other party sign it. An invoice reminder letter is a polite way of telling someone they have not paid their bill. This may be useful for a business that offers services and sends an invoice at the end of the month, and it may be useful for a private party who has loaned a friend or family member money and would like to remind them to repay. A reminder letter is important because without it, the bill may never get paid.
A letter has the advantage over an angry phone call because it allows the business to craft a well-thought-out letter that presents all the facts while maintaining a professional demeanor.
The first step is to make sure all the facts of the situation are understood correctly. It would be embarrassing and unprofessional to send a letter demanding payment only to learn later that there were mitigating circumstances. For example, the invoice may have been lost in the mail and never reached the customer, or, if the invoice was sent by email, the customer’s span protection may have deleted it before the customer saw it. The points that should be clarified are:
• The information on the invoice is correct
• The format of the invoice is correct
• The invoice was actually sent and when
• The due date is past
• The invoice was received by the customer
The business should have a policy relating to the time overdue invoice reminder letters are sent. Some will send them one or two weeks after the due date. One way to decide timing policy is to test several on customers. It may become clear what timing has the best effect. If it’s sent too early, the customer may still not be in a position to pay, and if it’s sent too late, the customer may not take it seriously.
The tone of the letter should always be polite. Even if the person feels angry that the bill hasn’t been paid, it won’t help to express anger and threats or try to intimidate the recipient of the letter, and it could make the situation worse. After all, the aim is to get the money.
The first reminder letter should be friendly and remind the customer that they have been satisfied with the company’s service in the past. The letter can also state that receiving payments are vital for keeping a small business operating. It can also give the customer several options for payment such as:
• Credit card
If a second or even third reminder needs to be sent, the chances are the bill may never be paid. This reminder can also be friendly and mention that the company appreciates the customer’s business, but gives pertinent details such as:
• How many days the invoice is overdue
• How many previous reminder notices were sent
• A fee will be added to the overdue bill
• A request for an immediate reply upon receiving this letter
• A reminder of several payment methods
Along with the invoice reminder letter, there are some documents that should be included such as:
• A copy of the original invoice with the word Reminder stamped on it and the amount and date due highlighted
• A new invoice, if applicable, that includes any late-payment fees or interest
• A pre-addressed envelope can be included so that the address of the business is clearly presented
By Andre Bradley