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How to Write a Past Due Invoice Email (And Send Less of Them)

Find out how to write effective overdue invoice emails with these tips and examples.

Late payments cost global businesses upwards of $3 trillion, according to a 2017 economic study from Sage. This same study found that a whopping 1 in 10 invoices isn’t paid on time, and 10 percent of payments owed are never paid — eventually making it to the bad debt pile.

So how do businesses try to collect on invoices that go unpaid? For many, the first step is writing and sending an email reminding the customer that the payment is outstanding and due immediately. But unfortunately, the story doesn’t end there, as repeated follow-ups often get no response (or subsequent payment). In this blog, you will learn: 

  • How to write effective, standardized 30, 60, and 90-day past due invoice emails
  • How to write a proactive detailed/nuanced sequence
  • Ways to reduce late payments and avoid overdue invoices 

Past Due Invoice Email Sequences with Examples

Sequence 1: Standard 30, 60, and 90-Day Unpaid Invoice Emails

30 Days Past Due Invoice Email

It’s important to send your first email as soon as the due date passes. To provide a sense of immediacy, it should be cordial but firm. Often, overdue accounts are simply an oversight, so those customers will appreciate a professional reminder. In general, the email should be:

  • Formal - This is an important issue that should be taken seriously.
  • Direct - Get to the point, quickly.
  • Clear - Define the ramifications of being overdue, such as late fees
[Subject] Reminder of balance due for account #12345
Dear Jeff,
This is a friendly payment reminder that your account is now past due.
According to our records, the following account is overdue:
[Account Number Due Date Amount]
As your account is now overdue, a late fee of [amount] has been assessed.
For your convenience, you may make a payment here: [payment options]
If you have any questions or need to discuss your account, please reach out to me at [phone].
Thank you for your attention to this matter and your continued business.
Sincerely,
John

60 Days Past Due Invoice Email

When an account reaches 60 or more days overdue, the likelihood that it will be paid drops significantly. At this point, it’s time to send a more strongly worded email and add follow-up phone calls to your sequence. The email should be sent to the primary contact and a manager if possible. At 60 days, the email should be:

  • Bold - Include language that reflects the importance of the issue, like “requires your immediate attention”.
  • Urgent - Action needs to be taken and it needs to happen now.
  • Flexible - Offer to provide payment plans if needed.

[Subject] Reminder of balance due for account #12345

Dear Jeff,

This is to inform you that your account is now 60 days PAST DUE. This requires your IMMEDIATE attention.

[Account Number, Due Date, Amount, Late Fee]

You may make a payment here: [payment options] 

Please let us know the status of your payment. If you need to set up a payment plan or have any other questions, please contact me at [phone number]. 

We hope to resolve this matter quickly as continued delinquency will cause us to close your account and refer it to a collections agency.

Sincerely,

John

90 Days Past Due Invoice Email

You are now on the brink of contacting a collections agency and there are real concerns you will not be paid. There are real consequences now and there could be legal ramifications. This email should be:

  • Formal - The language should reflect the severity of this issue.
  • Clear-Cut - Articulate next steps i.e. collections agency or legal actions.
  • Concise - The fewer words the better.

[Subject] Reminder of balance due for account #12345

Dear Jeff,

This matter requires your IMMEDIATE ATTENTION. We have contacted you on numerous occasions regarding a now 90-day overdue account.

[Account Number, Due Date, Amount, Late Fee]

If you do not settle your account by [date], it will be referred to a collections agency.

You can avoid this by remitting your payment as soon as possible using any of the following payment options: [payment options] Please contact me at [phone] with any questions. 

Sincerely, 

John

Sequence 2: Unpaid Invoice Email Escalation

This is an example of a slightly more detailed and nuanced sequence. Feel free to use the following escalation email sequencing: reminder, nudge, on notice, direct ask, and the final option. 

The Reminder

For the initial touch point, you’re providing a courteous reminder to someone with a busy schedule. Send this email one week before payment is due.

Subject: Reminder of balance due for [account number]

Hi Mr. Smith,

I hope this finds you well. This is a quick reminder that your payment on [account number] is due next week. The balance due is [amount].

I know you’re busy, but if you could take a quick look over the attached invoice when you get a chance, I’d appreciate it.

Please let me know if you have any questions.

Thank you!

Steve Johnson

The Nudge

This is the initial call to action and you’re actively seeking payment. Send this email on the payment due date and keep it brief. 

Subject: Balance due today for [account number]

Hi Mr. Smith,

This is just a reminder that payment on [account number] is due today. The balance due is [amount] and the invoice is attached.

You may easily pay through [payment options]. 

If you have any questions, feel free to reach out to me. We appreciate your business.

Sincerely,

Steve Johnson

On Notice

This is the initial past-due invoice email letting the customer know their account is in default and payment is expected immediately. You should also clearly state any associated late fees. Send this email one month after the payment due date.

Subject: Balance past due for [account number]

Hi Mr. Smith,

Our records show that [account number] is overdue. The balance due is [amount] and an invoice is attached.

I appreciate you giving this your immediate attention. If the payment has already been sent, please disregard this notice. 

[Information on late fees]

If there are issues I’m not aware of, please reach out to me.

Sincerely,

Steve Johnson

The Direct Ask

Now the tone is more urgent. Late fees have been charged and a threat of being sent to collections should be raised to get their attention. Send this two months after the payment due date.

Subject: IMMEDIATE ATTENTION: [account number] in default

Hi John Doe,

This requires your immediate attention.

This is a second reminder that [account number] is overdue, with a balance of [amount]. This payment was due two months ago. A late fee of [amount] has been assessed, bringing your total amount due to [balance + late fee].

An updated invoice is attached.

Remit payment immediately to ensure your account is not sent to a collections agency.

Please respond to this message to acknowledge receipt. If you have any questions, please reach out.

Sincerely,

Steve Johnson

The Final Option

At this point, your business has no choice but to turn to a collections agency to settle with this customer. The full amount of late fees is assessed and the account will be closed and you’re severing the customer relationship. Send this email three months after the payment due date.

Subject: FINAL NOTICE: Account [account number] in default

Hi Mr. Smith,

This is a final notice that your account balance of [amount] is due. This includes late fees totaling [late fee amount].

A final invoice is attached.

If this account is not settled within seven days, your account will be closed and sent to a collections agency. 

If you have any questions, please contact me.

Sincerely,

Steve Johnson

The Best Option: Reduce Late Payments Altogether

If your business is plagued by late payments, start by taking a 360-degree view of your business to attack late payments from all angles. Think about how to encourage on-time payments, including using incentives, automation, and upfront deposits. 

Consider Pricing Structure

Many businesses allow customers to purchase products and services on credit, which increases the likelihood of overdue invoices. In order to remedy that scenario, ask yourself what types of payment terms could you tack on to incent on-time payments. 

Here are a few ideas:

  • Offer customers a discount if they provide a credit card (rather than a mailed check) to be billed at predetermined times.
  • Require either a partial or full upfront payment.
  • Consider discounts for early or on-time payments (regardless of payment method).
  • Outline late fees to be charged if payments slip beyond a specific time window.
  • Give away a coupon for a free product or service for a certain number of on-time or early payments.

All these factors must be clearly detailed in each customer’s contract or terms and conditions. But, if it’s something you’re arranging after you have a large customer base, you can always go back and ask them to agree to new terms.

Study Incentives and Payment Flexibility 

Think about ways you could help reduce late payments while they are happening. What types of options could your business offer that might incent your customer to make the payment rather than ignore that unpaid invoice email?

Let customers know that they have multiple options to pay their balance. They may not know that you accept PayPal, or they just got so used to mailing in a check that they forgot about their new corporate credit card. Look at the business case for payment plans. If you want to keep customers no matter how long it takes them to pay, you could present them with a payment plan option to at least receive a partial payment. Decide if some sort of account “pause” option makes sense for your business. If you’re in a service-based business, it may work to allow customers to place a hold on their account until they can pay in full.

Evaluate Billing and Invoicing Platform

Don’t forget a critical component to reducing late payment: the billing or invoicing platform your business uses must support these different types of pricing structure logic in an automated fashion. Otherwise, you (or your employees) will be doing all the work manually.

Continue to Monitor Customer Behavior 

Let’s say you start implementing some of these strategies, and you’re seeing mixed results. Take a further look into your invoicing data to see what’s happening. Are larger purchase amounts generating longer past due invoices? Take a look at your slowest payers to find out. As a stop-gap, consider proactively offering those customers payment plans. For the future, evaluate changing your payment terms by requiring a credit card for any purchases over $1,000, or another appropriate benchmark.

Now that you have a proactive structure in place, let’s get back to writing your overdue invoice email template.

Solve Your Accounts Receivable Issues with Invoiced 

Sending these kinds of emails may not be pleasant, but they may be necessary. Your business’s bottom line may depend on it. If you have to send an email such as the above, following the above templates will at least ensure you're doing it right. The best way to address unpaid invoices is to eliminate them as much as possible. Utilize Invoiced’s automated accounts receivable platform to do just that! 

 

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