7 Tips on Writing a Great Email Reminder on Late PaymentsWritten by Marya Sutimi on July 12, 2021
Writing a reminder on late payments to your clients is never comfortable, but it’s necessary for the financial health of your business.
When you send an email reminder on late payments to clients, you need to address the issue politely but firmly. You don’t want to come across as rude, but you also need to be upfront to ensure that the client will take action and complete the payment.
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In this post, we will outline some tips to write an effective email reminder when you have to face late payments from your clients.
3 Things To Include In The Agreement To Avoid Late Payments
As a business owner, it’s important to include the payment policy in the agreement with your clients. The latter is essential since you can create some email reminder templates based on the length of overdue invoices to avoid late payments from the client’s side.
Here are some items to be included in your agreement to ensure that your client understands the payment policy before you start working together.
1. The Payment Terms
Establishing payment terms for your business can be tricky. However, it is necessary to maximize the understanding between you and clients, minimizing the inconvenience caused by late payments in the future.
There are some areas to include regarding the payment in your agreement. These include the following:
- The billing cycle, which is the schedule of when you’ll send the invoice to your clients.
- The payment schedule, which outlines the maximum length of period your client has to pay after receiving the invoice.
- The payment methods, which include the acceptable payment platforms and the payment details that come with them.
You should clearly outline the payment terms to ensure that your client understands what and how they pay for your products or services.
2. The Amount of Payment and The Deliverables
The scope of deliverables for the payment also needs to be included to avoid misunderstandings that could cost you time and money.
Outline your responsibility for the deliverables in the agreement, along with the price that comes with it. It will also help you set your boundaries with the clients if they want you to do some other tasks outside the scope of deliverables in the agreement.
3. The Additional Fees That Might Be Applied
You can also include some additional fees that are applicable when you work together.
From the late payment fee to the extra payment for some additional projects, you can outline everything in the agreement so the client will also have clarity about your tasks and their responsibility.
How To Write an Email Reminder on Late Payments
As a business owner, sometimes you need to do what you don’t like to do. It is one of the consequences of running your own business. Reminding your clients about the overdue invoice is one of them.
You rely on your client’s payment to run your business. But, at the same time, you don’t want to come too strong when you remind them about the late payment.
Here are some tips on writing a great email reminder on late payments for your client.
1. Get the timing right to send the reminder
Don’t forget to add the due date to the invoice before you send it to the client. Using an automated invoice tool will enable you to track it, so you can get a reminder when there’s a case of late payment from your client.
An invoice system like InvoiceBerry will help you set everything in automation, which includes sending the email reminder to the clients when they haven’t paid the invoice.
Not only can you send the reminder at the right time, but you can also create an email template for each payment step and tailor it accordingly. In addition, the feature will save you time instead of sending an email manually to the clients.
2. Be polite but firm to address the issue
Despite the late payment, try to keep using a friendly tone in your email. Sending reminders to your client can make you feel irritating on the one hand, but it will also show them that you’re a professional that values your time.
You can also use the combination of automated and personalized email to make sure that they get the reminders. When sending a personal one, you can also ask for a confirmation that they have received the invoice.
There’s a chance that they might face a technical problem that stops them from getting the invoice. So sending a personal email to confirm the receipt can also show your understanding of what might happen in the process.
3. Attach a copy of the invoice and include the payment details in the email
To forget is humane, but you can properly send the email reminder with a copy of the invoice attached. In addition, it would save your time if your client didn’t get the invoice due to technical problems beforehand.
This method is suitable for the first email reminder. You can keep it short and friendly, with the invoice attached as the courtesy of your intention to maintain the communication with your client.
4. Offer payment plan alternatives
If late payments become a pattern for your client, offering payment plan alternatives can be one way to go. It can be an effective tool to negotiate and ensure that they will proceed with the payment.
Offering installments in the payment may be more manageable for the client. At the same time, it can also ensure the cash flow projection into your business.
If both parties agree to use a new payment plan, don’t forget to update the agreement accordingly so you can always refer to the details outlined moving forward. Moreover, updating the agreement can do wonders if late payments become a habit, regardless of the change of the payment plans.
5. Add the extra fee for late payments
Charging interests on late payment can hold the clients financially accountable to make timely payments for your deliverables. Outline the clause in the agreement that states any fees and interest charges for the late payment, so your client can also understand the consequences.
You can also remind them again by adding the late payment policy to the invoice. It will raise the client’s awareness before making late payments, so they know the terms and conditions applied if they don’t make the payment on time.
6. Provide clear details of the deliverables
Clients are different, and some of them may refuse to pay if they’re not satisfied with the outcome. Double-check with the clients about the deliverables to ensure that they’re good to go, and outline the details in your invoice to avoid misunderstanding.
Another reason to include the details in your agreement and invoice is to prevent you from doing extra work outside the scope without any additional payment.
You need to be transparent about your responsibility and how you value your time. Add the clause to state the extra fee to charge the client for any work outside the deliverables or if they require additional revision and modification after you complete them.
7. Seek help from the third party
Sometimes, despite your friendly reminders through emails on the late payment, some clients have no intention to pay the invoice. Therefore, it is wise to do some actions beyond emails if the issue remains.
First, schedule a call to get it resolved, as sometimes that’s what it takes to get it done. However, if the client doesn’t reciprocate the communication, you might also need assistance from a third party.
Send a final reminder to your client citing your intention to turn the invoice over, and contact your lawyer or a collection agency to resolve the issue. It is mandatory to notify the client about the situation and give them one last chance to pay before getting lawyers or collection agencies involved in the matter.
Email Reminder Templates on Late Payments
You can easily set up the first email reminder in automation on InvoiceBerry, so your client will be notified once the invoice is due.
However, if they don’t get back to you after the first email and you’re still yet to receive the payment from their outstanding balance, you can also create additional reminders to improve your chances of collecting the payment.
Here are some email templates you can use based on how long the invoice is overdue.
Shortly After The Due Date (1-15 Days)
In this period, clients typically still respond to your email reminder. Some will proceed with the payment directly, while there’s a chance that they don’t get back to you immediately.
Even if the client didn’t reply to your email, you’re still entitled to collect the payment for your deliverables. Therefore, it shouldn’t stop you from the attempt to get the payment done as soon as possible.
One to Two Months Past Due Date (30-60 Days)
After the first email reminder, it is best to avoid sending emails every week as they might label your email as spam. If you’re still yet to get the response from your first email within the period, try to use another method to reach your client.
Call them to confirm the receipt of both invoice and email reminder, and send another email when it’s reached 30-60 days past due. If you have to send an email after their outstanding balance reaches 60 days overdue, it is a red flag that they might have no intention to complete the payment.
At this point, you need to be more firm in your email about the issue. However, you need to maintain your professional demeanor through the correspondence to address it.
Last Chance Before Sending The Third Party (90+ Days)
This is the worst-case scenario that could happen for the late payment. At this point, getting an attorney or a collection agency involved can be the best alternative to make sure that you will get paid for your deliverables.
Make sure to notify the client first before getting any third party involved. After all, you could only make the maximum effort to reach out to your client that persuades action.
When you run a business, you need a seamless collection process to maintain the well-being of your cash flow.
Overdue payment is only one of the many challenges you might encounter as a business owner. It is your job to put some effort into reaching out to your client who hasn’t completed the payment.
Set up your invoice system in automation through InvoiceBerry, and be proactive to remind your clients about their outstanding balance for the sake of your business!