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Also known as an ‘outstanding payment letter’, ‘debt recovery letter’ or ‘overdue invoice letter’, a 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 on sending emails to chase payment.
You've received a purchase order from a customer, sent the items, and issued an invoice – yet you haven't received payment. What do you do now?
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 what an outstanding payment letter should include, when to send a ‘nudge’, and how to take further action (if necessary).
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:
Here’s a late payment letter template, 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.
Choose to download your template now, or get it directly from Farillio’s site where you’ll also get access to their full suite of customisable legal templates.
At Simply Business, we often check the most recent legislation and guidance for small businesses, especially when it comes to finance and legal issues. Get hints and tips sent straight to your inbox and check our legal and finance hub for regular updates.
You can also 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 late commercial payments hub for more on charging interest and debt recovery, for quick reassurance of your rights and the proper procedures.
If you have legal expenses insurance as part of your Simply Business policy, you have access to a number of useful services through DAS Businesslaw (you’ll just need your voucher code found in your policy documents to register).
DAS has a legal advice helpline, available whether you’re facing a serious legal issue or just want to check something with an adviser. They also offer a range of legal templates and guides to help you with managing tenancies.
Remember, this article is just a guide, and it's always worth seeking professional legal advice.
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