Payment reminder example: all the information you need

Unpaid invoices are a thorn in the flesh of every entrepreneur. First, because it takes time to go after them. However, there is a solution with efficient debtor management and automatic reminders. Entrepreneurs who manage their own accounts receivable need to keep a tight rein on their liquidity. It is then useful to have a payment reminder example as well as other important information about defaulters.

What is a payment reminder?

A payment reminder is a written or digital notice to a debtor that he/she has failed to pay an invoice. In this respect, it is a simple reminder and an incentive for the debtor to pay. A payment reminder always states a term within which the payment must be made.

See our example for a payment reminder

Neutral in tone

A payment reminder is not a reproach to the debtor, but neutral in tone. It may happen that a debtor has simply forgotten to pay an invoice on time. This happens quite often, just as it happens that a debtor is accustomed to using a term of thirty days, and you might use fifteen days as a payment term. 

When to send a payment reminder?

It is important to actively approach debtors if payment is not forthcoming. If the payment period is 30 days, send the reminder immediately when the period has expired. This way, the debtor is immediately aware of the outstanding amount and will not be faced with surprises later. Payt can help by sending automated follow up mails on outstanding invoices. 

Are you a business that receives or pays with cash? Then you are obliged to keep a cash book.

Mandatory reminder to individuals

If an invoice remains unpaid and is sent to a private individual, it is mandatory to send a payment reminder. If the private individual still does not pay, it is necessary to send a so-called fourteen-day letter. There is an exception to this in the case of private individuals. In that case, it is possible to send a fourteen-day letter instead of a first reminder.

No mandatory reminder to businesses

If a company’s invoice remains unpaid, it is not compulsory to send a reminder. However, it is a good idea to remind the debtor of the outstanding invoice. This prevents a disruption in the business relationship. In principle, it is possible to start the collection procedure immediately if a company fails to pay on time, but in practice, this hardly ever happens.

Tight credit management

It is advisable to keep a tight control on debtors, and therefore send out a reminder as soon as possible. If you wait too long before sending a reminder, it will take even longer for the money to arrive. If you want to chart your customer’s payment behavior at a glance, a debtor card is a handy tool in this regard.

Send payment reminder by e-mail

The fastest way to send out a payment reminder is by e-mail. This message arrives directly in the mailbox of the recipient. It is, therefore, preferable to use e-mail to remind the debtor that an invoice is outstanding. Incidentally, this does not mean that it is not also possible to send a written reminder by letter, but this takes more time.

What is the reason for non-payment of the invoice?

In certain situations, it is possible to find out the reason an invoice is not paid. Perhaps there is already a conflict over a product delivered or service purchased, a dispute. In that case, it is advisable to talk to the other party. It is very easy to start a dialogue at invoice level. 

Requirements to be met

When sending a reminder to a debtor, the message must meet a number of requirements. A payment reminder should state that it is a reminder of an unpaid invoice. The invoice number of the invoice to which the reminder relates should also be stated. It is also important to state the number of days within which payment must be made or to specify a specific date. Furthermore, the outstanding amount must be stated, as well as the bank account number. It is also possible to state the collection costs.

• Payment reminder
• Invoice number
• Latest date of payment
• Outstanding amount
• Bank account number
• Naming debt collection costs

The second reminder

Unfortunately, not all debtors pay the invoice after the first reminder. If payment is not forthcoming, it is often a good idea to send a second reminder. This will contain the same information as the first reminder. Of course, the second reminder should also be sent. It is advisable to keep the final payment date shorter in the second reminder.

Reminder if payment is not made

A reminder is sent after the second reminder or perhaps after the first reminder if there is a suspicion that payment is not being made at all. A reminder is basically the same as a reminder but comes across as somewhat more threatening. It can be seen as a final reminder before steps are taken for further collection. Instead of naming a reminder as such, it is also possible to use the name third reminder. 

Difference between a payment reminder letter and a demand letter

Is there a clear difference between a reminder and a demand? Not really. The terms can be used more or less interchangeably. There can be a first, second and final reminder. Or a first and second reminder. One can also speak of a payment reminder, followed by a demand letter and finally a notice of default.

What value does a payment reminder have?

A payment reminder has, in any case, the value of urging a debtor to pay. It also has a legal value. By sending a payment reminder, you show that everything has been done to get the invoice paid. There is, therefore, a legal value in the event that you take the debtor to court for non-payment. By having the debtor management well under control, there is a greater chance that debtors will pay immediately or after a reminder.

Get your outstanding invoices paid faster with Payt

As you have just read, without the use of smart software, the collection of outstanding debts can be a lot of work. This valuable time can be spent on other things. With the smart debtor management software from Payt, you will automate most of this work while you also get paid faster. Try Payt now with our free trial period or request a demo from one of our consultants.