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How to draft and send payment reminders? Tips + free examples

Drafting and sending payment reminders

With a payment reminder you remind your customer that there is an overdue invoice. Your communication will once again inform your customer, that payment is still to be made and remind them of their contractual obligations.

The tone of a payment reminder is usually friendly. There may be a genuine reason why your customer hasn’t paid. For example, they may have actually paid already but the payment has not yet registered in your account. Or your invoice has not arrived correctly for a certain reason therefore your customer is not aware of an outstanding invoice.

Sending a formal letter immediately, full of legal terms, is not necessary. We advise you to always send a friendly payment reminder first. In this way, the relationship with your customer remains good, because of course the outstanding payment may just be a mistake.

When is the best time to send a payment reminder?

You should send a payment reminder immediately after the due date of the invoice. This will show that you have an efficient accounts receivable management process and that you take your financial administration seriously. Moreover, there may also be a misunderstanding on the part of your debtor. It is better to act quickly and not leave it too long before you take action.

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How many payment reminders should you send?

This is different for each situation. If your debtor is a business customer, there are usually no rules for sending payment reminders. In principle, you can transfer a receivable directly for collection if it is not paid within the agreed payment term. We just do not recommend this. It is best to always call your debtor first and send a friendly payment reminder.  This way you can keep your business relationship intact.

Has your payment reminder had no effect? Then you should send a final reminder to your debtor stating that you are handing over the claim to a debt collection agency if it still isn’t paid on time. In addition, state that the costs incurred in this respect will be charged to the debtor.

Tip: do not send a first or second payment reminder!

You can send your customer several payment reminders, but don’t communicate this to your customer. As soon as you put 'first payment reminder' or 'second payment reminder' on the letter, it is clear to the debtor that more will follow. Why else put 'first payment reminder' on the letter? For many debtors, this is a reason not to pay immediately. It suggests to the debtor that they will have more time to pay and that the debt collection process has not started.

Therefore, make sure that you only include the word 'payment reminder' on the letter. This will prevent debtors from not taking you seriously and waiting for the next letter before they take action.

What must be included in a payment reminder?

The purpose of the payment reminder is to ensure that your debtor is aware of the outstanding debt and that they still need to pay. A clear letter is therefore very important. In this way, your debtor knows exactly what will happen should the debt not be paid. This increases the chance of payment. You should therefore include the following elements in your letter:

Let them know that payment has not yet been made

It must be clear to the reader what the purpose of the payment reminder is: there is an outstanding claim and it must be paid as soon as possible.

Refer to the unpaid invoice

A clear payment reminder specifies which outstanding invoice is involved. It should also state what products or services have been delivered, the invoice number and the due date of the invoice. The clearer the payment reminder, the more likely it is that your debtor will pay the invoice quickly. After all, it saves a lot of research if your debtor knows which invoice has not yet been paid.

Communicate all outstanding costs

You also need to inform the debtor of the outstanding amount. In addition to the outstanding invoice amount, you also need to communicate any additional costs that have been incurred, such as interest and debt collection costs. These need to be clearly detailed on the invoice so the debtor understands how much they need to pay.

Which account should the money be transferred to?

Again: make it easy for your customer to pay your invoice. State which account number the money needs to be transferred to.

Specify a concrete payment term

Let your debtor know when the outstanding amount has to be paid. It is important to be as concrete as possible. You should indicate a specific date instead of "payment within 7 days", this removes any ambiguity for your debtor. For business debtors, we advise you to stick to a payment term of 5 days, but of course you are free to use a longer or shorter term if you so wish to. You should also check what term is normally used in the country of your debtor.

Make an impression with an original, creative payment reminder!

Clear payment reminders usually ensure that payments are made quickly. Would you like to impress your debtor a little more? Send an original or creative payment reminder. This will make your payment reminder stand out even more! Whether it also has the desired effect, we couldn’t possibly say, but your customer will undoubtedly appreciate it and remember it.

Read more: 3 special payment reminders for unpaid invoices

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Should you send a payment reminder by registered mail or e-mail?

A payment reminder is not a legal document, so you can choose how you want to send a reminder. In fact, you don't even have to send a payment reminder in writing, it's also fine to do this by phone. The disadvantage is that you have no proof of it.

When you send the payment reminder in writing, this can be done by e-mail or by registered mail. If you send a registered letter, you can be sure that your invoice has been received. However, it is no longer customary to send the letter by post, as a lot of communication nowadays takes place by e-mail. So, you can also send the payment reminder to your customer by e-mail, or even via WhatsApp.

Payment reminder costs

For unpaid invoices, you can charge debt collection costs. Our advice, however, is not to charge collection costs when sending your first payment reminder. Only do this when you send the final reminder.

Sending a payment reminder in English

Do you conduct international business? Then it makes no sense to send your foreign debtor a payment reminder in your own language. There is very little chance that your debtor will pay if they don’t even understand the letter. Therefore, always try to send a payment reminder in the language in which you communicate with your debtor. However, if you can send a payment reminder in the language of your debtor, this is even better and will give you a greater chance of getting your invoice paid. To help you get started with this, we have provided an example of a payment reminder letter in the English language.

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