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Friendly payment reminder emails that get you paid on time (7 templates included)
5 min read

Friendly payment reminder emails that get you paid on time (7 templates included)

Friendly payment reminder emails that get you paid on time (7 templates included)

Accounting and marketing are like water and oil; they just don't mix. At least, that's how many marketers feel. I could write pages about the differences in mindset between finance professionals and their marketing counterparts. Still, this article is really about how a touch of personality can help you clear those aging accounts receivables. I've got a series of email templates you use today to get those outstanding invoices settled without upsetting your clients.

The real cost of overdue invoices

Cashflow is king. Anyone in business is probably familiar with this phrase, but cash flow is often even harder to manage in a society where credit is the norm. Many companies rely on making product and supply purchases based on payment terms of 15, 30, or 60 days. These terms allow the business to purchase the supplies they need to fulfil their services. This has allowed companies to take on large contracts without having to "borrow" money to buy the supplies they need.

Here's the problem.

If your customer takes an extra 30 days to pay your bill, you either have to:

a) Pay your supplier late (don't do this)b) Pay your supplier on another form of credit (credit card or line of credit)c) Pay from your cash reserve (if you can afford it)

Each late payment puts more liability onto your business which has a real cost. If you are paying for these fees in the form of interest on credit, you know the immediate financial price, but there is also the opportunity cost of what the money could be doing to better your business.

Preventing late payments

Late payments are unavoidable in the real world but there a couple key things to address to reduce the number of overdue invoices and keep your CFO happy - even if that's yourself.

  1. Set clear expectations upfront
    I've often found that invoices that are paid late are often related to unclear expectations with customers. Customers need to understand the billing schedule and payment terms at the beginning of the process. If you're buying a product from a shop, you know you'll owe the money before you can leave. Every business needs to be clear about when they will require money, how each invoice is broken down, and if the payment will cause a stop in the fulfilment.
  2. Make paying the invoice easy
    Help your customers understand how to make payment. There is nothing more confusing than getting an invoice from a new vendor without directions on how they want to receive payment. Some vendors prefer wire transfers, mailed cheques, or payments by credit card. Make it easy for them by clearly stating your preferred or accepted payment methods.
  3. Send out payment reminders before and after the invoice is due
    It's always been important for me to pay every invoice I receive promptly. That said, sometimes invoices come in by email and get lost down the inbox, and it helps to have a reminder that comes in before the invoice is due. Sending out invoices two days before the invoice is due dramatically cut down our average time to get paid.

Payment reminder email templates

To help you get to cut down on those pesky overdue invoices, here are the templates I use. Feel free to use them and customize them for your own purposes and if you come up with anything to improve them, send me a note.

Email #1: Sending the initial invoice

Subject: Invoice {INVOICE_NUMBER} from {COMPANY_NAME}

Hi {CONTACT_FIRST_NAME}

Thanks for doing business with {COMPANY_NAME}. I'm sending you invoice {INVOICE_NUMBER} for {TOTAL} that will need to be paid by {DUE_DATE}.

To view your invoice, click here: {INVOICE_LINK}

You can make payment by cheque, Interac e-transfer, or credit card. Feel free to use whichever method is convenient. If you are paying by Interac e-transfer, please send the payment to {ACCOUNTS_EMAIL} or mail the cheque to {OUR_ADDRESS}

Let me know if you have any questions or concerns.

Email #2: Two days before due

Subject: Reminder: Invoice {INVOICE_NUMBER} from {COMPANY_NAME}

Hi {CONTACT_FIRST_NAME}

This is just a friendly reminder that payment on invoice {INVOICE_NUMBER} is due in 2 days.

To view your invoice, click here: {INVOICE_LINK}If you are paying by Interac e-transfer, please send the payment to {ACCOUNTS_EMAIL} or mail the cheque to {OUR_ADDRESS}

Let me know if you have any questions or concerns.

Email #3: On the due date

Subject: Your invoice {INVOICE_NUMBER} is due today

Hello {CONTACT_FIRST_NAME}

This is just a reminder that payment on invoice {INVOICE_NUMBER}, which we sent on {INVOICE_DATE}, is due today. Please make the payment using any of the payment methods listed below.

To view your invoice, click here: {INVOICE_LINK}

Interac e-transfer, please send the payment to {ACCOUNTS_EMAIL}

By mail, {OUR_ADDRESS}

Or by credit card, {INVOICE_LINK}

If you have already paid the invoice, please disregard this reminder.

Email #4: Fourteen days after the invoice was due

Subject: Your invoice {INVOICE_NUMBER} is 14 days overdue

Hi {CONTACT_FIRST_NAME}

Our records show that we haven't yet received payment of {AMOUNT} for invoice {INVOICE_NUMBER}, which is overdue by 14 days. It will be appreciated if you look into this.

To view your invoice, click here: {INVOICE_LINK}

Interac e-transfer, please send the payment to {ACCOUNTS_EMAIL}

By mail, {OUR_ADDRESS}

Or by credit card, {INVOICE_LINK}

If you have already paid the invoice, please disregard this reminder.

Email #5: Thirty days after the invoice was due

Subject: Attention: Payment Outstanding

Hi {CONTACT_FIRST_NAME}

We haven't received payment from {COMPANY_NAME} for the outstanding {AMOUNT} in respect of our invoice {INVOICE_NUMBER} which was due for payment on {INVOICE_DATE}.

I understand this may be a hectic time for you, but this invoice is now 30 days overdue and is becoming problematic for us too.

Please let us know when we can expect to receive your payment. If cash flow is an issue, let us know so we can plan internally.

To view your invoice, click here: {INVOICE_LINK}

Interac e-transfer, please send the payment to {ACCOUNTS_EMAIL}

By mail, {OUR_ADDRESS}

Or by credit card, {INVOICE_LINK}

If you have already paid the invoice, please disregard this reminder.

Email #6: Forty-five days after the invoice was due

Subject: ATTENTION: Final notice on the outstanding invoice

Hi {CONTACT_FIRST_NAME}

Regrettably, the overdue invoice has not been settled despite multiple attempts to communicate. This email is to notify you that if the outstanding invoice is not paid in the next 15 days, we will be forced to file your account with a debt collection agency or escalate the case through legal means.

Please act now to address this matter.

To view your invoice, click here: {INVOICE_LINK}

Payment Received Email

Subject: Payment received

I just wanted to drop you a quick note to let you know that we have received your recent payment for invoice [invoice reference number]. Thank you very much. We really appreciate it.

Have a plan for non-payment

This is not what you want to hear, but it does happen where a customer refuses to make payment. This could be for a variety of reasons and causes a gut-wrenching feeling when it happens. It's important to have a plan in place to make sure there is a process for when this happens rather than frantically calling around to see what your options are.

It's recommended to consult a legal professional on what your options are based on your individual circumstance. Usually, the options fall into 3 categories:

  1. Keep following up yourself - Persistence often pays off.
  2. Debt Collection Agency
  3. File a suit (Small Claims Court for under $35k)

A factor to consider when collecting on business debt. This may not be in your control depending on your business, but some debts are safer to write off. Collection can cause customers to lash out in public forums causing hurting the business's brand. This can often cause more damage to the brand image we've spent enormous amounts of energy to cultivate than the debt is worth. It's up to you to make the call.