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Collection letter for non payment

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Collection letter for non payment
March 28, 2019 Wedding Anniversary Wishes No comments

Here are useful tips that will help you to quickly write a Collection Letter. As per to the signed contract by both the parties, if the payment is not made in time.


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:

  • Days past due
  • Amount due
  • Note previous attempts to collect
  • Summary of account
  • Instructions- what would you like them to do next?
  • Due date for payment- it is important to use an actually date, not “in the next 7 business days” as this can be vauge
  • Your contact information

Dear ,

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:

  • Mention of all previous attempts to collect, including the first collection letter
  • Original invoice due date
  • Days past due
  • Invoice number and amount
  • Instruction- what should they do next?
  • Offer help to work on the payment terms
  • Hint at the impact non-payment could have on their credit terms/ratings
  • Your contact information

Dear ,

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:

  • Mention of all previous attempts to collect
  • Invoice number and amount
  • Original invoice due date
  • Current days past due
  • Instructions on what they should do next
  • A warning of the impending consequences
  • Your contact information and final request to contact you

Dear ,

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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Late payment letter templates for chasing payment of overdue invoices - ready for Use our CreditXS online debt collection service and add interest and our.

Sample Billing Letters for Past Due Balances Over $250

collection letter for non payment

Demand Letter Sample

Collection Letter

Our demand letter sample template provides the perfect tool for leaders to firmly request payment using a balanced and effective tone. Business owners are often required to make phone calls and send official letters to collect money that is past due.

As a business owner, it would be easy to take past due payments personally. However, smart leaders won't make judgments about a debtor. You'll never know the full story behind the late payments so it's wise to pursue payment in a non-judgmental, professional manner. - always. 

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Collection letters come in all forms, ranging from the initial polite 30 days late request for payment, to a very firm 90 days past due 'pay by x date or legal action will be taken' type of demand. 

No matter how firm the demand, it's important to leave your emotions at the door. Never make the situation personal. Always maintain a professional approach. Emotional reactions will never serve you well when demanding payment. 

Your letter should get straight to the point. State up front in the letter the original terms of payment that you both agreed to in good faith.  

Invite the customer to contact you whether he can or cannot make payment. Open communication between both parties is a key factor to resolving the delinquency.

Remain open to some level of negotiation. Be open to re-writing the terms of payment in order to allow the borrower to make smaller payments over a longer period of time. You might also consider offering some sort of incentive to the debtor, possibly in the form of a discount for paying off the debt in full. Work for an agreement that is a win-win.

If the borrower admits to feeling overwhelmed or is fearful of his ability to make future payments, it's important to be empathetic. At all times use a respectful and sincere tone. Gentle persuasion is always a more effective communication tactic than screaming a demand for payment.

"Collecting accounts receivables is a vital and necessary business practice that no one enjoys. So, it's important to do it with compassion and respect."

If multiple collection letters are necessary, the tone of each subsequent letter will become more firm. Polite requests become more of a firm demand - yet the manner in which you choose your words and the spirit in which you deliver them should always remain respectful and professional. Never allow your personal feelings to show through. Remember, you simply have a job to do - nothing more, nothing less.

In your final demand letter, state clearly what the penalties and fees will be if the customer does not meet the final timeline for payment.

Make it clear to the customer that if payment is not made by a specific date you will have no choice but to forward the case on to your legal representative who will take necessary actions on behalf of the organization to pursue payment, which could result in additional legal fees that will be passed on to the customer.

Our demand letter sample template will assist you in preparing a highly effective document.

Demand Letter Sample Tips

Collecting money from people is a job suited best for those with a caring and compassionate heart. Never assume why someone isn't paying on time. Not everyone who falls behind on payments is irresponsible. There are all kinds of reasons why someone can't make timely payments, such as unexpected medical bills, loss of job, natural disasters or other. 

It's not up to you to make judgment, but you do have an important job to do for your business and there is a right and wrong way to go about doing that job. 

Follow these five simple steps when using our demand letter sample template:

  • Letter #1 - The first letter contains a friendly notice that gently reminds the customer about their past due situation.
  • Letter #2 - The second letter is another reminder message, yet the tone is a bit more direct in nature. A direct request for payment by a certain date is appropriate at this time.
  • Letter #3 - The third remains cordial but no longer gives the assumption that the borrower has forgotten to pay. This letter should make reference to the two prior reminders that have been sent. At this point the letter can state possible penalties for a failure to pay by a certain date. Mention how non-payment can negatively impact their credit rating. 
  • Letter #4 - The tone of the fifth letter significantly changes to a firm demand for payment. The tone of this letter, while firm, remains professional. You are no longer requesting assistance, you are putting the borrower on notice that they owe you x amount by a specific date, or else you will proceed with all legal options available to you to collect the debt.
  • Letter #5 - Final Notice - The final letter in this series is short and to the point. It's important in this final notice to inform the customer precisely the amount owed and by when. Notify the customer that if she fails to reply within a certain time frame how you intend to escalate the matter. Make sure that whatever you say you are going to do, you are absolutely prepared to follow through. 

Collection Letter Template

Shown below is an image of our demand letter sample template. Use this tool to demand payment in a firm but supportive manner that both sides can feel good about. 

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"If a person gets his attitude toward money straight, it will help straighten out almost every other area of his life."

- Rev. Billy Graham

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Debt Collections Letter Template

collection letter for non payment

Also known as an ‘outstanding payment letter’ or ‘debt recovery letter’, a tried and perfected late payment letter template is a handy tool to have on file.

Here’s our guide to writing a polite nudge, clear reminder and final notice – check what works for you and start cutting down the chasing emails.

Most of the time, late payment can be easily settled with a quick email to your customer, gently reminding them that payment is overdue. When that doesn’t work, however, or you get no response, a letter in the post can help to formalise the situation. Make sure you’ve got an up-to-date address for correspondence, and keep a copy and record of everything you send and receive.

To get you started, here’s a quick run-down of what an outstanding payment letter should include, when to send a ‘nudge’ and how to take further action, if necessary.

What should a late payment letter include?

Hopefully you’ll only ever need to send one polite nudge for late payment. But if not, you may need a couple of other templates to get the message across, including a firm reminder and a final notice letter.

These are the basic details each letter needs to include:

Late payment letter 1: polite nudge

  • your company name and address
  • recipient’s name and address
  • today’s date
  • a clear reference and/or any account reference numbers
  • the amount outstanding
  • original payment due date
  • a brief explanation that no payment has been received
  • next steps (you could give the recipient the opportunity to contact you and/or pay within a specific number of days)
  • payment options
  • reference to your payment terms

Late payment letter 2: firm reminder/late payment charges letter

  • your company name and address
  • recipient’s name and address
  • today’s date
  • a clear reference and/or any account reference numbers
  • the amount outstanding
  • a reference to your polite nudge or last communication
  • a brief explanation that payment is still outstanding, and any charges that may be added in line with your payment terms (and current government legislation)
  • next steps, including a cut-off payment date
  • payment options
  • reference to your payment terms

Late payment letter 3: final notice/letter before action

  • your company name and address
  • recipient’s name and address
  • today’s date
  • a clear reference and/or any account reference numbers
  • the breakdown of the total amount outstanding, including any additional charges/interest
  • a reference to your reminder letters or last communication
  • a brief explanation that payment is still outstanding and now in breach of your payment terms
  • explanation of any further costs added
  • next steps, including a final cut-off date and consequences for failure to pay (this will depend on your debt recovery arrangements)

Outstanding payment letter template

Here’s a late payment letter template, giving a reminder of the amount outstanding and due date, plus next steps.

You’ll need to edit this according to your business and circumstances, for example it might be more appropriate to mention a specific invoice that hasn’t been paid, rather than an overdue account balance.

Late payment letter online tips and resources

It’s worth staying up-to-date with Simply Business, as we’re always checking the most recent legislation and guidance for small businesses, especially when it comes to finance and legal issues. Subscribe to our monthly newsletter and check our legal and finance hub for regular updates.

Still having issues? Invoice financing experts Aldermore Bank work with small businesses every day to shelve the headache of chasing up late payments. Use our quick late payments form to get a quote from them today, using the ‘Invoice financing’ option when choosing from the menu.

And finally, you can get a lot of insight from gov.uk, especially when it comes to late payments, debt recovery and due compensation. Take a look at their hub for all the latest legislation, for quick reassurance of your rights and the proper procedures.

Remember, this article is just a guide, and it’s always worth seeking professional legal advice.

Click here to download an overdue payment reminder letter PDF

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Late payment letter template - free PDF or Word download

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Here are useful tips that will help you to quickly write a Collection Letter. As per to the signed contract by both the parties, if the payment is not made in time.

Writing a past due letter: samples for professional letters requesting payment

collection letter for non payment


Dear <<NAME>>,

Re: Invoice No. <<XXXXXXX - $XXX.XX>>

We refer to our above Invoice and previous requests for payment. We note that despite our requests our Invoice remains outstanding. Please note that you are now in default of our Agreement.

Unless you now attend to payment in full strictly within seven (7) days of the date of this letter it is our policy to refer the matter to our Collection Agent, Fast Track Debt Collection, for recovery without further notice. Please note that if such action is necessary you will also be liable for collection costs and interest pursuant to our Terms & Conditions of Trade in addition to the invoiced amount.

We understand that Invoices can sometimes be inadvertently overlooked or not prioritised.

We trust that you will now give this matter appropriate attention and attend to payment within seven (7) days so that no further action will be necessary on our part to recover payment.

If you are unable to attend to payment within seven (7) days please contact us on receipt of this letter so that alternate arrangements for paying and securing the debt might be considered.

We look forward to payment.

If you have already attended to payment, please disregard this letter.

Yours sincerely

Writing a letter to collect payments from your customer is very important. collection letter samples and he responds to you, there's no need for.

collection letter for non payment
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