Q:

How should you use overdue payment reminder letters?

A:

Quick Answer

When the need arises to send out overdue payment letters to customers, SME Toolkit recommends setting up a formal system to send out a series of reminders. This system can include letters or phone calls along with letters. The tone of the letters gradually progresses from friendly to firm. Businesses have flexibility in how they manage this system.

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Full Answer

Every payment reminder is brief and to the point. To save time, the company can create template versions of each letter and fill in specific details when needed, according to the IT contracting and freelancing blog of expert UK technical consultant and software developer Jaffa Brown. The first letter takes a friendly approach while reminding the customer that his payment for a specific dollar amount has not been received. In this letter, the assumption is that the customer simply forgot and will pay promptly. Adding a call to action at the end by asking for payment provides gentle authority.

If the customer does not send in payment, his non-response triggers follow-up letters, notes Brown. The second letter, for instance, could still take a mild tone while being more firm in asking for payment. The end of the letter may stress the importance of paying promptly. If this letter is ignored, the remaining follow-up letters can be firm in tone while demanding immediate payment. Consequences of non-payment can be stated strongly in subsequent letters.

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