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Chasing Late Payment With Letters & Emails

Chasing Late Payment With Letters & Emails

Have you experienced late payment?

It is something all too familiar for many businesses in the UK.

When the payment date comes and goes and you are still waiting on getting paid it can not only be frustrating but worrisome too.

There is some good news though.

There are things you can control that affect how soon you are paid.

Writing your invoice email

Steps you can take to getting paid quicker start with your initial invoice.

Over the years we have experienced so many excuses from debtors for late payment where they have blamed the invoice.

A serial debtor and customers who will think they can get away with it will try all the tricks they can including using any error on an invoice as an excuse not to pay.

Do your due diligence. Make sure all the details are correct such as addresses, payment details, correctly itemising products/services delivered and checking your invoice and reference numbers are correct. Also make sure your VAT information is included if you are VAT registered.

A frequent mistake we see is invoices not being sent to the correct person or department, resulting in the invoice getting lost. If you do not know the best person to send your invoice to get in touch with your customer and double check. This will help your invoice get processed sooner resulting in your cash being paid quicker.

When sending an invoice always include it as a downloadable pdf file as an email attachment. Not only is this a secure way to send your invoice it also makes it very accessible for your customer, so there is no excuse for them not to receive it. Naming the pdf file is very important too, include the invoice number, payment date and the name of your company so that if the file is downloaded there is less chance of it getting lost on your customer’s device.

Your customer is likely inundated with hundreds of emails making it very easy for your invoice email to get lost. By including as much relevant information in your email subject line both you and your customer will find it much easier to find the invoice if needed. Your email subject line should include invoice number, payment date and your company’s name.

When it comes to writing your email there are some key details to include in the body of your email:

  • Invoice number
  • Payment date
  • Your name and company
  • Information on the product or service delivered

Sending a reminder on your payment date

When your payment date arrives, we recommend sending a gentle reminder that payment is due that day.

Include your company and invoice number and “payment due today” in the headline so that you customer will instantly see that the invoice needs paid that day.

You should also take this opportunity to include your payment details and attach your email again, eliminating the classic “we haven’t received your invoice” excuse. A friendly and straight to the point approach is the best course of action to take with payment reminder emails.

Email to chase payment

In the event that a payment is missed it is best to chase the payment immediately. Mistakes can happen and your missed payment could be completely accidental. But there is also the chance that your customer may be intentionally avoiding payment.

You do not want to compromise your relationship with your customer as your reputation and repeat business are at stake, so it is important to always remain courteous when chasing payment. But do not forget to be straight to the point – alerting your customer that your invoice is now overdue and finding out when you can expect to receive payment.

Include the invoice number, your company name and the due date of the late invoice in the subject line of your chase email and attach your invoice as a pdf file again so that your customer doesn’t then need to dig for the original invoice when they receive your chaser email.

The first chaser email you send should include all of the information from the first email you sent with the invoice attached as well as highlighting payment is now overdue and asking when you can expect the full payment to reach you.

Often a light prompt is all it takes for an overdue invoice to be paid. However, you may need to take a firmer approach if your first chaser email is ignored, or you are stalled. A stronger payment reminder email template should be in your arsenal to call upon when needed.

Your stronger chaser email will have a greater sense of urgency and your approach will be stronger. In this email you should explain that the payment is now several days overdue and that this is now becoming a problem for your business, and again asking when you can expect payment of the full amount to be paid.

A measured and reasonable tone goes a long way, even if you are getting no where with late payments. Coming across as overly aggressive or rude likely won’t get you paid any quicker and you also risk damaging your reputation and your business relationship with your customer.

Sending letters to chase late payment

Sending a letter to chase late payment is very similar to sending emails. In fact, your approach, the language you use and when you send them are very much the same as the emails we covered.

Now, you may be asking what is the point in sending letters then?

When chasing late payment, you want to be as hard to ignore as you possibly can and by communicating with your customer across multiple channels it keeps you in the front of your customer’s mind and harder to avoid.

The typical business email inbox can be a very hectic place, often meaning your emails could be missed, even if you take the steps we discussed earlier in this article. As businesses receive so few letters each day compared to the number of emails, they receive there is a far lesser risk of your letter being missed.

The downside to sending letters is that they are more of an inconvenience to send compared to email so you may want to save letters for your more critical communications such as when an invoice becomes overdue.

Writing a warning letter chasing payment

A warning letter is the first letter to send once an invoice is overdue. A firm but polite approach is the best approach to take and you should include:

  • Your company name and address
  • Your customer’s name and address
  • Invoice number
  • Total amount owed
  • Payment date and days overdue
  • Explain that payment terms have been breached
  • Payment details
  • Your contact information
  • Ask your customer if they have any questions since this could be what’s delaying the payment.
  • Include a copy of your invoice with the letter.

Writing a strong letter chasing payment

If your first letter and emails go unanswered it is time to send a stronger letter.

Like your second chasing email the language and approach in this letter will be firmer than the first reminder letter, emphasising the urgency of payment.

Articulate that this late invoice is now a problem for you and payment needs to be made immediately otherwise the case will need to be escalated.

Again, don’t sabotage your reputation. You should always be polite when chasing payment and oftentimes a strongly worded but fair approach is all that is needed for your customer to pay you.

Getting The Professionals Involved

Late payments are increasingly becoming a problem for businesses in the UK and things have only gotten worse due to the impact on the economy in the past 12 months.

If you are struggling with late payments, we would recommend taking action before it is too late. With the current shape of the UK economy, even as we begin recovering from the pandemic, we are likely to see many corporate insolvencies over the next year. If you are owed money, take action to recover what you are owed before it is too late.

Deciding whether to outsource debt collection to a third-party is a big decision for a business to make and sometimes they can be nervous if they have not used a debt recovery partner before. If you find yourself in this position you should always go with a partner with a track record recovering commercial debt with a service you can rely on.

If you are wondering when you should outsource to a commercial debt recovery company we’ve written a handy article to help you see the warning signs before it is too late.

Talk to our friendly team of commercial debt experts today by calling 01698 821 468 or schedule a call at a time that suits you.

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