A finance charge of up to 10% of the unpaid balance is automatically added to your (list rent past due, month and amount, late fees and any other charges).
Whether you sell widgets or provide services and expertise, letters requesting payment on past due accounts are a necessary part of doing business. Sometimes, people simply need to be reminded about their debt. Other times, customers may be purposefully avoiding their obligations. In the former case, these letters can speed up payment of the amount due; in the latter, they can help demonstrate the steps you took before seeking formal collection efforts, which may help you prevail in court. In all cases, the letters should be drafted clearly, concisely and in a polite, professional manner
The introductory section of the letter should clearly state the balance due. Following a simple salutation (such as “Dear Mr. Smith,”), open the letter by cordially reminding the reader about the exact amount owed. Use a statement such as “This letter is to remind you of your outstanding balance owed to ABC Corporation. Our records indicate your account is past due in the amount of $56.39.” Prior to drafting this section of the letter, verify the exact amount due with your accounts payable. Attach a copy of the outstanding invoice to the letter and make reference to the attachment in this section.
Depending the nature of the debt, your business’s accounts payable policies and how quickly you would like to recoup the money owed, the acceptable form of payment is another important detail to state clearly. Cash in hand is obviously faster than waiting for a personal check to clear, but depending on the amount it may not be feasible to demand repayment this way. Likewise, not every business accepts credit cards, and companies may accept one issuer’s card but not another. In any event, include a statement such as “Payment may be made by cash, check or credit card. We accept Visa or Mastercard. Checks may be made out to Accounts Payable.”
Do not leave the demand for repayment’s deadline open for interpretation. Use a statement such as “Please remit this balance within 10 business days or contact our office immediately to make a payment over the phone.” Stating a deadline not only reiterates the sense of urgency for the reader, but also gives you a timeframe for when you can expect payment and allows you to consider what to do next if payment is not rendered within that window.
If there are any consequences for a further delay in payment, state them in the closing of the letter. A common consequence is the initiation of formal legal action to recover the amount in court. Other consequences may be elevating the dispute higher up in the organization or stopping services. If the letter is a final warning, use a statement such as “This is the final notice you will receive. If we do not receive full payment within 10 days from the date of this letter, we will seek all legal remedies available to recover this debt.”
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This statement is sent on day 60 of the patient statement timeline.
Any Doctor Medical Practice
1234 Any Street
Any City, Any State, 12345
Phone # 555-555-5555,br> Fax # 555-555-5556
Address Line 1
Address Line 2
City, State, and Zip Code
Our repeated attempts to collect the balance due on your account have been ignored. Your account has been referred to an outside collection agency, ABC Collection Agency Services. In order to prevent negative marks to your credit history, we suggest you contact us immediately to make a payment. We accept MasterCard, VISA, and Discover.
If your payment is already on its way, we thank you and ask that you please disregard this notice. If not, we would appreciate receipt of your payment as soon as possible. If you are unable to make payment in full due to financial difficulties, a reasonable payment plan is available so you can satisfy your obligation and keep your account in good standing. If you would like to further discuss the details of your account, please do not hesitate to call patient billing at (555)555-5555.
Any Doctor Medical Practice
Get Paid in 90 Days or Less From Aged Accounts
Most accounts receivable professionals barely have time to make all the phone calls necessary and send out every email, let alone make an individualized collection letter for every step of the collections process. However, following up every few weeks with a personalized letter requesting action from a non-paying customer truly helps to collect payment on time. Since every subsequent collection letter should change in tone and consequences of non-payment, we’ve created ready-to-use collection letter templates. Read on below to find out what every letter should say in order to collect payment as soon as possible.
Just because this is the first collection letter, this doesn’t mean this is your first point on contact with the customer. By now you have sent the invoice, sent due date reminders and let them know when the invoice has gone past due. The first collection letter should be sent out to the non-paying customer as soon as the invoice has gone past due.
Since this is only the first letter, it is important to keep the tone friendly, informative and professional. There are many reasons why the customer has not paid on time, such as never receiving the invoice or missing something important on the invoice. By giving them a chance for explanation before getting upset and pushy, you are able to keep a great customer-vendor relationship.
This first collection letter should contain the following information:
This is just a friendly reminder that your account is past due. According to our records your balance of $ is currently . We have emailed a detailed copy of your account statements. In the event you have not received these messages and documents, we have provided a summary of your account below.
We would much appreciate if you could let us know the status of this payment. Please contact us or send your payment of $[Insert Amount] to the address below by April 16, 2015 if you have not already done so.
If there is some error or you are unable to pay at this time, please contact me at so we can correct any errors or arrange for another payment plan. Thank you for your prompt response to this request and for your continued business.
The second collection letter can be a tough balancing act. While your tone needs to become more assertive since the first letter seems to have gone ignored, you still need to remain friendly towards to customer. Finding the gray area between assertive and friendly is always difficult.
The time to send the second collection letter is either two weeks after the first collection letter has gone ignored, or after a promise to pay from the first letter has gone past due.
The second collection letter should include:
At this time we have not yet received a payment in regards to nor have we gotten a response to the letter sent on . Your accounts is now days past due and you owe a total of .
As a valued customer, we would like to help you quickly remit payment to avoid any actions that could damage your credit rating or future credit limits with our company. If there is any reason you are unable to pay in full, please contact me at and I would be happy to talk about arranging a payment schedule that is mutually agreeable.
Please get in touch with me immediately if you would like to work out a payment schedule, otherwise please submit your payment of by . We can accept your credit card information over the phone, through our online payment portal, or I have enclosed a self-addressed envelope for your convenience should you choose to send a check in the mail.
Thank you in advance for your prompt response to this letter and for your continued business.
At this point, you have now sent multiple letters and made multiple attempts to collect. For every week that an invoice goes unpaid, the likelihood of not collecting on the full amount increases. For this reason, the tone of this letter will be very different than the rest. You will be notifying the customer that if they do not pay immediately, you will be forced to refer their account to a collections agency or involve a lawyer.
Although the third collection letter can be quite frustrating, it is important to continue to remain professional. By simply stating the facts and what the impending consequences
The third collection letter should include the following information:
At this time we still have not heard from you in regards to invoice which was due on nor have we gotten a response to the letter sent on , the letter sent on , or our numerous attempts to call and email you. Your accounts is now days past due and you owe a total of $.
I regret to inform you that unless we receive payment in full by or work out an agreed upon payment plan by this date, we will have to turn your invoice over to a collection agency and/or our attorney.
I hope to hear from you before this action must be taken to avoid damage to your credit rating or our future business relationship. Please contact me immediately at so we can get this matter settled.
With this final collection letter, you have now done everything you can and are simply letting the customer know that the matter is no longer in your hands. Although it is not mandatory to let the customer know that their account has gone into collections or turned over to a lawyer, it can help to keep the relationship in good standing and make a smooth transition. This also gives you a last final attempt to collect, and when lawyers are involved, people usually start to hustle.
This letter is significantly shorter than the others because it is simply a notification letter. It will serve as proof of the multiple times the customer was contacted, the invoice in question and the amount that is due. Remember: even as the final notice, you still must remain professional.
At this time we still have not heard from you in regards to invoice for $ which was due on . Nor have we gotten a response to numerous phone calls, emails, or the letters sent on , , or .
Because we have failed in our attempt to work this out with you directly, I regret to inform you that we have reported this issue to the credit bureau and turned this invoice over to a collection agency who will be in contact with you in regard to the payment of this invoice.
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a payment that is past due you can use this letter template to tactfully request Our records indicate that you have an outstanding balance of [$Amount] with a.
Late payments are a common occurrence for small businesses, but through consistent Receivables Management, you can whip all your customers into reliable, on-time payers. Besides being organized, how you word your past due letter is the most important step towards being successful. As experts in collecting payments and Receivables Management, here are our top tips!
Approximately 15-7 days before the payment is due, send your customer a friendly and polite reminder. Approach this email or letter as a “courtesy call”.
Begin with “For your convenience” to signify that this is not a nagging email, merely a helpful gesture. We all know how busy small business life can be!
Keep the email personal and friendly, and include a link to the invoice and payment options.
The very first day a payment is past due, send your first collection email. It’s important to let the customer know you are aware of their delinquency, and overall quite on top of your Accounts Receivable. Over time, this immediate action policy will train your customers to prioritize your invoices. Most past due payments are simply due to disorganization or preference for longer payment terms- not malice. As such, your first past due letter should be firm, but still cordial. Use more formal language to signify your serious intention, and to prevent the late payment as becoming a personal issue. To avoid defensiveness or tension, broach the issue delicately by saying “your account with us now appears as past due”. Be sure to include the invoice you’re referencing, the date it was due, and a short reminder about your payment policy. “As you know, our payment terms are 30 days from the date of the invoice”. The first past due letter is the perfect time to bring up any late fees your company may assess to the total. Always include payment options in your past due letters so they can be acted on as quickly as possible. Follow up this payment reminder with a call. If possible, record the conversation for accurate record keeping. If no response comes from the first email, re-send it at the 45-50 day mark.
When an invoice is between 60-90 days past due, the likelihood of successful collection can dramatically drop. It’s very important to send a strong series of emails and diligently follow up with calls during this time period. An invoice that is 60+ days past due is less likely to be due to simple disorganization, it is more likely that there is an underlying problem. It’s important for this past due letter to be firm, include bolded words, and formal language. Include additional employees of the company on the email, including the highest ranking administrator you can find an email for. Also consider sending individual emails to other members of the department.
Your subject line can begin with “IMPORTANT” or “Requires Immediate Attention” or “Action Needed”.
Instead of taking the “alert” approach, be direct: “we are writing to inform you that your account is now 60 days past due”. Include phrases like “immediate attention” or “urgent matter”.
Let them know you will be calling and continuing the follow-up process. It’s helpful to remind them that you’re a business too, so include language such as “our quarterly financial needs require all accounts to be paid in full”. Remind the customer that due to business policy, you will be unable to conduct continued business with a customer who is currently past due, or has two incidences of being 60+ days past due.
Given the reduced likelihood of successful collection after 90 days, follow up emails to your 60 days past due letter should include offers to work out a payment plan or to help them find credit options through Fundera or Kabbage.
Invoices that are between 90 and 120 days past due are significantly more difficult to collect on. Your payment reminders for invoices in this category should be quite firm, formal, and utilize tactics to get their attention like bolded text or enlarged fonts. State the consequences of their actions and your numerous attempts to get in touch. Include additional employees of the company on the email, including the highest ranking administrator you can find an email for.
For invoices over 120 days past due, there is still some chance of collection and therefor sending additional communication is still worthwhile. Include the consequences of their actions (bad debt write-offs, credit score) as well as language letting them know you will be taking the appropriate actions to report their severe delinquency: collections agency and the BBB.
Use bold language like “severe” and “delinquent”. Continue including additional employees of the company on the emails.
You can download collection letters from our free tools section, or send out one of our many pre-loaded collection emails from our app (the FG Receivables Manager).
It tracks the emails you send in a customer contact history and records any phone calls.
You’ll be able to see if the customer open or clicked your email. Emails in the FG Receivables Manager also have detailed invoice views and the ability to receive payments.
Tags: accounts receivableaccounts receivable managementcollection letterspast due customerspast due invoicespast due letter
The current rent balance letter is sent from a landlord to a tenant to inform of any past due or monies owed from non-payment of rent or other dues owed.