Asking for money can be uncomfortable, so having a plan for how you communicate at each stage of the collections process can alleviate stress. You should have a dunning letter template on-hand that you use when a client still hasn’t paid you after the invoice date.
When your client has outstanding payments, you have been friendly for long enough. You sent the original invoice, a friendly reminder letter before the invoice became due, and another friendly letter after the initial deadline had passed. It’s time to start transitioning to the Medium Demand Letter.
When transitioning to sterner language in your collection communications, you want to simply remove all the friendly frills and be as straightforward as possible.
“Your account appears to be past due” becomes, “Your account with us is past due.”
“We would much appreciate if you could let us know the status of this payment” turns into, “Please call us to let us know the status of this payment.”
You still don’t need to graduate to words like “immediate attention.” A late payment is a big deal, but you still want to retain this client for the future. At this “medium” stage, walk the line between being overtly friendly and severity or harshness.
The Right Subject Line
The email subject line should catch the recipient’s attention to avoid the potential of the email being overlooked.
- Payment needed on April invoice
- Please reply today – awaiting payment
- [Name], did you receive my last email?
Avoid exclamation points and ALL CAPS; no one likes to feel like they’re being yelled at. The idea is to get the person to open the email and send you the payment, not to avoid doing it because the email looks too intimidating!
What Doesn’t Change
Be sure to include the invoice details, like you did in the friendly demand letter. Don’t make them look for the details of the original invoice; include them right there in the body. The invoice number, invoice date, due date, and payment due should all be easily accessible.
You also still want to ensure that you’re addressing the letter to the person who can handle this matter immediately. If you usually communicate through a project manager, but you know that the business manager cuts the payment checks, address this sterner communication to the project manager but send it to both of them. Sometimes seeing a boss copied on an email is the motivation someone needs to finally send a payment.
Keep track of which letter you have sent, to whom, and when. Hopefully the client will pay promptly after receiving this letter, but if not, you will need to have all of these records for future recourse.
If you’re using an invoicing system like FG Receivables Manager, check to see if the email was ever opened, and make a note of that in your records, as well.
Keep your customized templates easily accessible so late payments don’t become a headache. That way you can get back to doing what you do best: running your business smoothly.