5 Tips on Writing an Email Reminder on Late Payments

Téa Liarokapi Téa Liarokapi 2021-06-28
invoice reminder overdue payment

Any business owner, and small business owners, in particular, are always meticulous about their budgeting and finances. Usually, they've got everything down to a tee, from organizing their expenses, right up to creating invoices for their clients and knowing exactly when they're supposed to receive their payment.

When it comes to payments, being right on time can be crucial for a small business, as it can break a chain of processes that need to be completed for a job well done.

And even though sometimes being late on payments is only human, most of the time, it's a matter of principle and perspective. Hence the need for a payment reminder email.

And since payments are a little bit of a touchy subject. After all, not many enjoy reminding their customers of overdue payments, and nobody likes to be called out as a client not to be trusted. This is why there are some specifics on how you can write a payment reminder email, that go beyond the best time to send an email and the best words to use to let your customers know without insulting them.

But let's see how you can word that request without your fair request sounding like an unfair demand.

Tackling the Issue: The Hows and Whys

Being too vague regarding payments and payment deadlines could imply that the client can proceed after receiving your product - even weeks or months after. 

So, if you've completed what the customer asked of you, and if the customer has received the goods and is alright with their quality, here's how you can make your life easier.

Step No.1: Set Up an Automation Tool

You may be wondering how an automation tool would help you write an email reminder on late payments.

Here's one of the reasons:


Using automation tools will save you time writing and editing your email reminders instead of going through the 15 steps mentioned above. You can use an email template builder tool to create late payment templates.

Make sure to use precise and clear words to express how late payments are not something you usually permit. At the same time, try to be as respectful as possible.

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Your late payment template needs to include some specific pieces of information that you'll be able to change accordingly each time you have to edit and send it - hopefully, it won't be too many times.

So, include the invoice number, the date the client received the product or service, the amount due and the latest date when your client could have transferred you the amount, and, of course, your contact details.

Generally speaking, workflow automation tools allow for more time to tackle important issues. Using an automation tool and creating invoices and late payment templates will help you streamline the process while minimizing the possibility of human error.

In InvoiceOcean, you can easily set up reminders for overdue invoices, so you can integrate your invoices with email without going for a separate tool. For example, you can define a 1,2,3,14-day delay for reminders to be sent automatically. Also, you can set up a custom message with invoice details being recorded as dynamic fields – you don't have to add them every time you send a reminder email to your client.

Step No.2: Create Different Templates for Different Reasons

Not all situations are the same, of course. This means that you will need to create different templates of payment reminders for different situations.

Let's take things chronologically. Your first template should be a polite reminder for those whose payment is overdue for no more than fourteen days, and it should look something like this:

Most likely, your customer will proceed with an online payment or bank deposit right on the spot. More often than not, people forget, and emails - and invoices are no exception - could get lost or ignored.

As you can see from the example above, the tone is not strict; it's conversational and respectful, and it seems like it takes the possibility of human error into account. After all, fourteen days or less is not that big a deal.

It could be a big deal if your customer doesn't get back to you for more than that, though, which marks the time for your second email reminder on late payment. Make sure to word it like so:

In this case, a late payment could harm your business - SMB, freelance writing, design projects, anything - and you need to use a tone that could reveal that. Don't be afraid to be firm, and don't be afraid to remind your client of every little detail. 

If this doesn't work either, we get to our final reminder, which needs to be the strictest one of the three. Use this template if the client's payment is more than thirty days overdue.

As you can see above, this is the final warning before your client faces legal consequences. Make sure to use language that will pinpoint that, point out any extra charges - such as a late payment fee -, and, again, be thorough with dates and send this email as a reply to the previous two.

The point is for the customer to understand that when you were showing off your work - whether it was a product your SMB carries, your design portfolio, or even just a consultation at your freelance venture - you made an agreement with them. This agreement included a price tag that was not optional and should be evident from the first late payment reminder.

However, it's best to keep in mind that your wording doesn't always need to be strict, especially when the payment is not that long overdue. Words can make a huge difference and motivate people, so: 

  • Make sure to be as neutral as possible - strict doesn't mean annoyed or frustrated, after all.

  • Be firm and business-like, especially in the last two cases. 

  • Mention legal repercussions when you get to the final email, but not sooner than that - you don't need to sound threatening.

  • Don't beat around the bush and use your copy to get straight to the point from the moment you compose your subject line. Include the invoice number and the phrase "late payment reminder".

Step No.3: How to Avoid the Spam Folder

What happens when your emails end up in the spam folder, and you can't get a hold of your client because of that? In that case, your late payment is neither your client's fault nor yours.

The reason why some emails go to spam can be because of your wording - using words like "MONEY" in all caps, for example, can trigger spam filters. But what can you do to avoid the spam folder altogether?

First of all, you need to avoid trigger words and phrases. Spam filters target promotions, so if your email's copy or, worse, your subject line is written in a spammy way, the client's spam filter will send your late payment reminder right to this folder.

Another issue would be using links and combining them with trigger words. It's best if you attach the late payment invoice to your email. Linking to it and asking for payment could very well look like a phishing scam.

Invest in a trusted ESP with good deliverability rates. After that, compose a subject line that will be grammatically correct, won't include exclamation points, capital letters, or the words "MONEY" or "URGENT". 

Also, make sure to check for typos and grammatical errors. Your formatting could also send you straight to the spam folder.

Step No.4: Should You Take Legal Action?

The truth is that you should if your customer ignores your email reminders on the payment due. However, this can be a strenuous process. And it will bring your relationship with the client to an end.

Legal action should be the last resort, and you should go forth with it only if there is no other solution available. Otherwise, it will be bad for your reputation and harm your pr efforts, especially if you're a freelancer.

To avoid legal action:

  1. Make sure that your client has indeed received your email first.

  2. Give them a call, introduce yourself and ask them whether they've received your invoices.

  3. Try to be polite and collected, and double-check the email address you have. If it's the correct one, tell the customer to stay on the phone while sending the late payment notice again.

  4. Make sure they confirm that they received the notice.

You'll see that sometimes, the only reason why your payment is long overdue is because of technical issues or simple miscommunication. And if you can't get a hold of them over the phone, a simple text message could work - just make sure you're familiar with your country's text messaging laws. Sometimes a text message can be more welcome than a call, as it can prove that you have tried to contact your client several times. This can be valuable in case things do go to court.

Step No.5: The Pointers to Follow in General

In SMBs and freelance ventures, late payments are sometimes inevitable. However, there are some things you can clarify upfront.

  • Don't rely on the customer reading the repayment "fine print". Point it out yourself. Repayment terms are not open to interpretation, and you should be clear about when the first (second, only, etc.) deposit is due.

  • Send your invoice straight after providing service. If your client bought the goods from an eCommerce store, they would be asked to pay at the checkout, where they would also be informed about the store's return policy and payment options. It would help if you did the same and had your invoice ready to be paid right on the spot. It's more likely for the customer to complete the transaction right after they've received the goods.

  • What is your payment timeframe? Discuss it beforehand. I think this is pretty self-explanatory. Again, timeframes are not open to interpretation, so you should be very clear about when your repayment period starts. You can discuss this with the client when discussing the specifics of your work and let them know that the invoice is "Due X days after receipt" both beforehand and upon receiving your invoice.

  • Incentivize timely payment with a discount. All professionals use this, and it's a measure that works. And you can get bonus points and timely payments if you charge a late payment fee as well.

If these sound scary, you can always simply ask for an amount of money in advance. That way, you will attract clients who will pay you in full after you're done, no questions asked. 

The Takeaway

Overdue payments can be a real bummer and can stump your business's growth. However, sometimes it's just a matter of being too swamped to remember financial issues.

Keep that in mind when writing a late payment email, and always be clear and upfront about what your service offers and the repayment timeframes you're okay with.