Late payment letter – templates, tips and government help

Also known as a ‘debt recovery letter’, a tried and perfected late payment letter template is a handy tool to have on file. Here’s our guide to writing a polite nudge, clear reminder and final notice – check what works for you and start cutting down the chasing emails.

Most of the time, late payment can be easily settled with a quick email to your customer, gently reminding them that payment is overdue. When that doesn’t work, however, or you get no response, a letter in the post can help to formalise the situation. Make sure you’ve got an up-to-date address for correspondence, and keep a copy and record of everything you send and receive.

To get you started, here’s a quick run-down of what your late payment letters should include, when to send a ‘nudge’ and how to take further action, if necessary.

What should a late payment letter include?

Hopefully you’ll only ever need to send one polite nudge for late payment. But if not, you may need a couple of other templates to get the message across, including a firm reminder and a final notice letter.

These are the basic details each letter needs to include:

Late payment letter 1: polite nudge

  • Your company name and address
  • Recipient’s name and address
  • Today’s date
  • A clear reference and/or any account reference numbers
  • The amount outstanding
  • Original payment due date
  • A brief explanation that no payment has been received
  • Next steps (you could give the recipient the opportunity to contact you and/or pay within a specific number of days)
  • Payment options
  • Reference to your payment terms

Late payment letter 2: firm reminder/late payment charges letter

  • Your company name and address
  • Recipient’s name and address
  • Today’s date
  • A clear reference and/or any account reference numbers
  • The amount outstanding
  • A reference to your polite nudge or last communication
  • A brief explanation that payment is still outstanding, and any charges that may be added in line with your payment terms (and current government legislation)
  • Next steps, including a cut-off payment date
  • Payment options
  • Reference to your payment terms

Late payment letter 3: final notice/letter before action

  • Your company name and address
  • Recipient’s name and address
  • Today’s date
  • A clear reference and/or any account reference numbers
  • The breakdown of the total amount outstanding, including any additional charges/interest
  • A reference to your reminder letters or last communication
  • A brief explanation that payment is still outstanding and now in breach of your payment terms
  • Explanation of any further costs added
  • Next steps, including a final cut-off date and consequences for failure to pay (this will depend on your debt recovery arrangements)

Late payment letter template

Here’s a template for a late payment letter, giving a reminder of the amount outstanding and due date, plus next steps.

You’ll need to edit this according to your business and circumstances, for example it might be more appropriate to mention a specific invoice that hasn’t been paid, rather than an overdue account balance.

Late payment letter template - free PDF or Word download

Enter your email address to start your download. Once you’ve filled that in you can select whether you want your template as a PDF or a Word document and it will be with you in moments.

Late payment letter online tips and resources

It’s worth staying up-to-date with Simply Business, as we’re always checking the most recent legislation and guidance for small businesses, especially when it comes to finance and legal issues. Subscribe to our monthly newsletter and check our legal and finance hub for regular updates.

Still having issues? Invoice financing experts Aldermore Bank work with small businesses every day to shelve the headache of chasing up late payments. Use our quick late payments form to get a quote from them today, using the ‘Invoice financing’ option when choosing from the menu.

And finally, you can get a lot of insight from gov.uk, especially when it comes to late payments, debt recovery and due compensation. Take a look at their hub for all the latest legislation, for quick reassurance of your rights and the proper procedures.


Remember, this article is just a guide, and it’s always worth seeking professional legal advice.

Click here to download a PDF of the late payment letter template.

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