Free Late Payment Reminder Letter Templates

Late payment is a constant problem for businesses in the UK and overseas. Credit terms are ignored and following up can be difficult for some companies, especially if you are a very small or micro business.

This is not how it should be. Every business, irrespective of size, should expect their customers to honour the agreed credit terms and pay in full and on time.

Alas this is often not the case and this problem has been addressed by successive governments who have enshrined statutory penalties for late payment in UK law. Most recently with the "Late Payment of Commercial Debts (Regulations) 2013". This statutory instrument gives every UK B2B business the right to add fixed costs, interest and reasonable debt recovery charges to any unpaid invoice.

But before you start hitting your errant customers with penalty charges and debt collection notices, you need to ensure that the late payment is not just a simple misunderstanding. If it is a simple mistake on the client's part then immediately treating them as bad payers is unlikely to endear you with the accounts payable department.

As such, we have three letters available for any UK business to use in order to help hasten payment. We start with a gentle reminder and build up to a formal final demand that outlines the applicable late payment penalties.

If you need a little extra help with the credit management in your business, find out how you can outsource your credit control to us. But for now, on to the letters:

Letter 1: The "nudge"

Letter tone: Gentle reminder

When to send it: The day your payment is due, if you haven’t received it. We find a measured approach to credit control works best, send this letter the day payment is due so your clients know you take your credit management seriously.

How to send it: By post or email. For the former standard mail service is fine, for the latter request a read receipt or delivery notification.

Credit control tip: Make sure you have the correct physical or email address and you are sending your reminder to the right person!

Get it here:

Letter 2: The firm reminder

Letter tone: Serious business

When to send it: Letter one allows your client a further seven days to make payment or get in touch, so if a week goes by and you still haven’t been paid it’s time to remind your client that you mean business.

How to send it: Again either by post or email, if sending by post consider sending recorded delivery and if using email get a delivery report.

Credit control tip: Give your client a further 48 hours and then give them a call. Don't rely on this correspondence in isolation, pick up the phone and speak to your customer.

Get it here:

Letter 3: The final demand

Letter tone: Demanding

When to send it: As per the warning in your second letter, if another week has gone by and your client still hasn't been in touch (or made sensible arrangements to pay) then it's time to "up the ante" and start adding penalties. You’re legally entitled to impose these costs on any overdue B2B invoice and if the client complains, remind them of your agreed credit terms.

How to send it: Recorded post and email. You’ll get a signed proof of receipt and your client will know you mean business.

Credit control tip: Follow up this demand with a final call chasing payment. Be sure to impress upon your client that they are overdue and that your company expects prompt payment. Be prepared to drop the charges in return for an immediate electronic payment, but do not accept any further delays as these serve only to increase the risk you will be left unpaid.

Get it here:

Next Steps

If your late paying client still hasn't made payment after receipt of your final demand then it is time to take action, if you've never engaged a collections company before then be sure to look for an agency that doesn't have any advance or hidden fees and that has a proven history of recovering unpaid invoices.

Our Debt Collection services require no advance payment, we don't have any hidden fees and we have been trading non-stop since way back in 1984. If that wasn't enough to convince you we are also the only debt collection company to be recommended by Crunch accounting, IPSE, The Publishers Association, Halton Chamber of Commerce and many more! If you have outstanding invoices, then maybe you should call the Safe Collections team.

Over 150 Years Of Industry Experience

Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.

© Safe Collections is a trading name of Safe Collections Limited. Incorporated 1984. Company Number: 01815264. VAT Number: GB407358159. All Rights Reserved.

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