If you’re an “average” American, you would have over $90,000 in debt.
There’s nothing average about that number…it’s massive. Yet, it’s the reality of the debt landscape that many of us face.
Unfortunately, your clients also happen to fall within that bucket.
Even if your business doesn’t focus on the direct-to-consumer market, your clients likely still have a mountaintop of debt to climb. The average small business is around $195,000 in debt.
With all of the debt on both the B2C and B2B sides of the equation, it doesn’t matter who you serve or what product or service you provide…you’re going to have clients who don’t satisfy their balance with you.
In a perfect world, you provide a service or product to your clients and they pay you. Simple enough, right?
The reality, though, is much different.
Yet, collecting from your clients might be less about their ability to pay and more about how you approach them.
Here are 5 friendly overdue invoice letter templates that exist to help get you paid.
Table of Contents
The Difference That Tone Makes
But why should you use a friendly tone?
Let’s look at two statistics that prove how important a friendly tone is in your collection efforts.
You see, your clients might not pay off what they owe you for a variety of reasons. Some of those reasons include…
They forgot about your bill
They currently don’t have funds available
They weren’t ever planning on paying you
The reasons why your clients aren’t paying you don’t matter. You can’t control them.
What you can control are the attempts you make to collect from your overdue client accounts.
Yes, dealing with overdue client accounts is frustrating. People who purchase products or services from you have a moral and legal obligation to pay you. That’s how business works.
However, you cannot let your frustrations with overdue accounts bleed into your collection efforts. On the receiving end of your overdue invoice letters is another person and the tone of what you send them has a massive impact on the chances of receiving payment.
Almost 80% of customers give up on a transaction because of a negative experience. I didn’t give you that statistic to say that the reason why your overdue clients haven’t paid you yet is due to your front-end customer service experience with them.
You see, any interaction with your clients is reflective of your customer service…even if that interaction is with someone who has an overdue balance with you. Thus, using a rude tone throughout the overdue letters that you send isn’t going to cut it.
On the flip side, nearly 70% of customers would pay more of their own money to get a better customer service experience.
So, what does a friendly tone look like in an overdue invoice letter? All it takes is a few minor changes
Don’t include phrases like…
“We’ve tried contacting you several times…”
“Please advise...”
“Immediately..”
“As soon as possible..”
These phrases are demanding in nature. More importantly, they aren’t empathetic.
Instead, “friendly” includes phrases like…
“If you’ve already sent us your payment…”
“Please bring your attention to…”
“We would be grateful if…”
“Thank you for your assistance with…”
I know, these friendlier phrases might not seem that effective when they’re pulled out of context. But, they help you understand the mindset before getting to the examples.
There’s a good chance that the overdue letters you’re sending now or have in the past use the phrases I mentioned NOT to use. The days of being an organization with no empathy and choosing outdated, professional language are over.
Switching to a more relatable and kind tone is the difference between being able to collect on outstanding balances and not.
Details Don't Change
Just because you’re using a friendly tone throughout your overdue invoice letters doesn’t mean that you stray away from the main objective.
Regardless of the tone you use, there are key data points that you need to include in the collection letters that you send…
Invoice #
Original Invoice Date
Payment Due Date
Payment Amount
Description of Services
All four of those metrics are key data points to provide at a minimum. If you don’t provide those metrics, you’re only making it harder for your overdue clients to pay you.
They need something to reference while they’re trying to pay you.
This section might seem obvious, but it’s worth mentioning. Tone doesn’t mean convolution.
The Friendly Approach
Now that we know that tone and content are equally important, let’s go over the right type of approach.
I know what you’re thinking, “Isn’t the ‘right approach’ using a friendly tone? That’s the entire reason why I’m reading this.” Yes, that’s the biggest takeaway of this blog post.
However, just sending one overdue invoice letter and hoping that it’s enough to satisfy your outstanding accounts, you’re setting yourself up for disappointment.
Remember in an earlier section when I said that some of your clients don’t pay you simply because they forgot? Well, statistics show that the percentage of people who have an overdue bill because it slipped their mind is almost 40%.
Those aren’t great odds, but there’s an easy solution to ensuring that your overdue clients don’t forget. Send them reminder letters as a campaign.
Out of clients with overdue balances who receive reminders (via Myob)…
21% pay within the first follow-up
20% pay within the second reminder
32% pay after their third reminder
Those are good odds.
Sure, sending reminders is a little bit of extra work, but the chances of your delinquent clients satisfying their overdue balances with you increase exponentially when you do.
Friendly Overdue Invoice Letter 1: One Week Before Due Date
Hi Richard,
I hope that you’re enjoying your new deck. Our contractors were so pleased with how it turned out, that they showed the entire office pictures upon completion of the project.
This is a friendly reminder that the due date for your invoice (#1234) for that project is one week away from its due date. Our system indicates that you should’ve received this invoice in the mail on May 20, 2023.
If you never received the original invoice, noticed an error in the balance owed and/or have any questions for me, you can gie me a call at (123) 456-7891.
Thank you for taking the time to solve this matter.
Best Regards,
[Signature]
Bryce Jones
Owner
Best Decking Inc.
Why This Overdue Letter Works: The first letter you send is nothing more than a notification. Keep it positive by using it as a way to thank them for their business. Bonus points if you incorporate personal anecdotes about the experience with the client. The recipient’s biggest takeaway from receiving this letter is that you actively track your accounts receivables.
Friendly Overdue Invoice Letter 2: On The Due Date
Dear Richard,
I know I sent a reminder regarding invoice #1234 with us just a few days ago. But, I wanted to reach back out and let you know that we haven’t received payment ($7,634) for it yet. You can make payment via the bank account listed on the invoice.
There’s a chance that you’ve paid this invoice and it’s still in transit. If that’s the case, you can give us a call at (123) 456-7891 to notify us that your payment is on the way.
Thank you for your assistance on this matter.
Best Regards,
[Signature]
Bryce Jones
Owner
Best Decking Inc.
Why This Overdue Letter Works: This example is the first call to action you’re sending to your client since you sent them their original invoice to make a payment. Thus, it’s also the most important one in the series. Be straightforward in what you say, while remaining polite and collaborative.
Friendly Overdue Invoice Letter 3: One Week After Due Date
Dear Richard,
Unfortunately, we still have not received your payment of $7,634 for invoice #1234. At the time of writing, your account with us is now one week overdue. You may send your payment by check via mailing the enclosed envelope, or by visiting our website and logging into our online portal.
It’s possible that you might have lost the original invoice. If that’s the case, please let me know. I’d be happy to assist you and send you another copy.
Alternatively, if you’ve satisfied your overdue balance with us by the time of receiving this letter, you may disregard this message entirely.
Thank you for your time on assisting with this matter.
Sincerely,
[Signature]
Bryce Jones
Owner
Best Decking Inc.
Why This Overdue Letter Works: The third friendly letter you send is the first one that acknowledges overdue payment. Since that’s the case, the tone starts to shift a little bit within this letter. It should spell out specific instructions for payment to cut down on any confusion the recipient may have.
Friendly Overdue Invoice Letter 4: Two Weeks After Due Date
Dear Richard,
We’ve sent you multiple reminders regarding your outstanding balance of $7,634 with us. Your balance is now two weeks past due. I’m requesting that you bring your immediate attention to your account with us and work with us to satisfy what’s owed.
If you cannot satisfy this balance, we do offer payment plans and financial assistance options to our clients.
Either way, please give us a call at (123) 456-7891 at your earliest convenience to work together in satisfying what’s owed.
Regards,
[Signature]
Bryce Jones
Owner
Best Decking Inc.
Why This Overdue Letter Works: If it’s been almost half a month and you still haven’t received any payment or communication with an overdue client, it’s time to get more direct. Make it clear that you’re not only requesting payment from them but also that they should communicate to you. This is also an appropriate time to mention financial assistance or payment plan options. At this point, any compensation is better than nothing.
Friendly Overdue Invoice Letter 5: One Month After Due Date
Dear Richard,
This is our final reminder regarding your overdue balance with us of $7,634 owed on invoice #1234. Per the terms of the original agreement, we may charge you an additional interest on payments received more than 30 days overdue.
Again, we offer multiple ways to make it easier for you to satisfy your balance with us by means of payment plans or financial assistance. These options are available to you.
Either way, please work towards settling this invoice immediately.
If I don’t hear from you within a week, we will have to turn your account over to collections.
Best,
[Signature]
Bryce Jones
Owner
Best Decking Inc.
Why This Overdue Letter Works: The final overdue invoice letter you send comes when an account reaches 30 days past the original due date. At this point, you’ve reached out to and made requests from the client in question multiple times to no avail. Don’t take that personally. Maintain professionalism, move through your accounts receivable process and mention turning their account over to a collections agency.
Conclusion
It doesn’t matter what vertical or industry your organization serves, you’re going to have clients who don’t pay off their balances within their deadline.
Nearly a quarter of payments arrive after their due date on a global scale.
Trying to collect from past-due clients is frustrating. They’re expected to pay you for the products and/or services that they purchase from you. That’s how the world operates.
But you can’t let your frustration bleed into the overdue invoice letters you send.
The reality is that collecting payment from outstanding accounts is still viewed as a customer service interaction. Thus, the tone of voice that the language you use is important.
After reading this blog post, though, you now know how to navigate that minutia involved so that you can focus on getting paid.
