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How to Write an Overdue Payment Reminder Letter7 min read

January 20, 2021
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How to Write an Overdue Payment Reminder Letter7 min read

You’re a freelancer, entrepreneur, business owner — you take pride in the services you provide and expect clients to honor their payment agreements for your hard work. 

Unfortunately, this isn’t always the case. 

Too many freelancers are either paid late or not at all. And this is a problem we see all across the world. For example, in America, 54% of gig economy workers say it takes too long to get paid. Then in Canada, 41% of freelancers are consistently paid late, and another 55% have unpaid invoices. This is a growing concern, especially when Canadian freelancers are owed a whopping $18.7 million in unpaid invoices. 

Thankfully, there are tactics you can use to help minimize late payments. Let’s look at how you can use an overdue payment reminder letter to get your invoices paid. 

5 Tips for Writing an Overdue Payment Reminder Letter

Crafting and sending an overdue payment reminder letter is something no freelancer wants to deal with. But as a business owner, you need to get the money you’re owed to stay afloat. 

A freelancer best practice is to always start a new client relationship with a secure contract that will protect the interests of both parties. With a contract in place, you’re already off to a great start. But even if you don’t have a contract to fall back on, you still have the right to be compensated for your services.

So here are several tips to increase the odds of your overdue payment reminder letter working. 

1. Know when to follow up 

You don’t want to send your overdue payment reminder letter too soon (or too late). As with everything in business, timing is important. If you send it too early, it could rub the client the wrong way, making them hesitant to work with you again. So you want to grant them time to look over your finished work. 

Ideally, you should follow up:

  • The day after the invoice’s due date for regular clients
  • A week after the invoice’s due date for new clients
  • And then 30, 60, and 90 days after the due date

The best time to send your overdue payment reminder letter is on the weekend (fewer emails to compete with in the client’s inbox). And on Tuesdays (Mondays are the worst since this is when inboxes are overfilled). If you want to pick the ideal time of day, opt for right before or after lunch. 

2. Include all necessary details in your payment reminder

Your client likely has more than a few freelancers they’re working with. So make it easy for them to know what the invoice is for, how much to pay, and how to pay.

In your overdue payment reminder letter, be sure to include the following information:

  • Invoice number and date
  • Amount owed
  • Payment terms (including late fees)
  • Payment instructions (add links)
  • Your contact details

3. Use the right language 

There’s no need to be overly aggressive in your initial overdue payment reminder letter. You can save that energy for later if your initial reminders are ignored. 

Here’s how to structure the language in your payment reminder letters:

  • 1-15 days late: Be friendly and polite — maintaining a good relationship with clients is critical for getting repeat projects. Emails in this time frame will help nudge procrastinators and forgetful clients to pay. 
  • 30-60 days late: Keep your tone professional, but urgent. Let the client know their payment is well overdue and needs immediate attention. 
  • 90+ days late: At this point, the odds of payment are slim. In your overdue payment reminder letter, let the client know you’ll turn their invoice over to a collection agency in X days if you don’t receive payment. 

4. Tack on late payment fees

It’s good to let your clients know upfront about your invoice policies, which include penalties for late payments. This way, they’re aware of the consequences if they miss the due date. 

But what should you charge as a late fee? State laws determine how much you can penalize customers for late payments. For instance, some allow you to charge an 18% interest total. You’ll then have to divide this by 12 to see how much you can charge in monthly late fees. 

5. Offer a payment plan

If the late fees don’t light a fire, then consider offering a payment plan. This will give the client a way to catch up rather than allowing the interest to pile up. 

Four Overdue Payment Letter Templates

Now, it’s time to review how to put together an overdue payment reminder using an overdue payment letter template. Here’s a look at several based on how late the payment is. 

1. First overdue payment letter template: One day late

Email subject: Invoice # is now 24 hours overdue

Message:

Hi {Client’s name}, 

This is a friendly reminder that your current invoice # (total: X) was due on {insert date}, and is now overdue. You can submit your payment to the bank account details/PayPal account linked on the invoice. 

I attached the invoice to this email for your convenience. 

If you have any questions or concerns, don’t hesitate to reach out so I can address them promptly. 

Thanks, 

{Your name}

2. Second overdue payment letter template: 7 days late

Email subject: Invoice# is 7 days past due

Message: 

Hi {Client’s name}, 

Our/my records show you’ve yet to satisfy your pending invoice of $X for Invoice #, making it now one week overdue. I’d greatly appreciate it if you could check into this on your end. 

If the payment was sent already, please disregard this email. In case you lost the invoice, I attached it to this email for your review and payment. 

Please reach out if you have any questions or concerns and I’ll get back to you right away. 

Thanks, 

{Your name}

3. Third overdue payment letter template: 2 weeks overdue

Email subject: Invoice# is two weeks past due

Message:

Hi {Client’s name},

I’ve sent you two emails reminding you of your pending payment of $X for Invoice #, but I have yet to receive a reply or payment. I’m sending you another reminder to inform you that your invoice is now two weeks overdue. 

If you have any questions about this payment, please let me know. I’ve attached a copy of the invoice to this email in case you lost or deleted it. 

After {date}, your overdue invoice will begin accruing interest/late fees, which I’d like to avoid. 

Could you send a quick reply letting me know you’ve received my email? Thanks in advance. 

Best Regards,

{Your name}

4. Final overdue payment letter template: 30 days past due

Email subject: Invoice# is 30 days late — please send payment ASAP

Message:

Hi {Client’s name}, 

This is the final reminder I’m sending you regarding your overdue payment of $X for Invoice #. Please note that as per my terms, I will begin charging you interest on payment received after {Date} and every month thereafter. 

Please reach out if you have questions regarding the invoice or payment process. Otherwise, please settle this invoice immediately to avoid having your account sent to collections. 

Kind Regards,

{Your name}

Be Proactive, Not Reactive

When it comes to getting paid on time, you need to be proactive. Rather than waiting for a client to become delinquent to reach out, consider sending payment reminders in advance.

You can do this a week before the invoice due date and the day of. Also, keep track of which clients are consistently late, so you can decide what to do. For example, you can drop the client or work out an arrangement that best suits their situation. 

Hopefully, these overdue payment letter templates will help you close invoices faster, so you can continue running a sustainable business. For more about invoicing, take a look at AND CO’s guide to invoicing as a freelancer.

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Arthur is a freelance writer and producer at ClearVoice. He specializes in adventurous outdoor storytelling and has a background in advertising. Find out more about Arthur, his adventures, and his writing at arthurmcmahon.com.
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