Tips to Be More Effective with Your Accounts Receivable Management
For businesses, it is important to collect outstanding invoices in a timely and professional manner. A payment reminder is an effective tool to achieve this and remind customers of their obligations.
In this article, we discuss what an invoice reminder is, when it should be sent, how many should be sent, and what should be included in the reminder text. We also provide examples and tips for sending payment reminders and discuss how companies can get help with sending these requests.
What is a Payment Reminder?
A payment reminder is a request to a customer to pay an outstanding invoice. It is a simple and formal way to remind customers that they have an obligation to the company.
What is the Difference Between a Payment Reminder and a Demand?
A payment reminder is a friendly request to pay an invoice. A demand is a more formal step taken if the payment reminder was not effective and the invoice is still unpaid. A demand usually has an official attachment and increased costs for the customer.
When Do You Send a Payment Reminder?
A payment reminder should be sent if the invoice has not been paid after the due date. It is important to wait until the due date has passed, as some customers may need extra time to pay the invoice.
How Many Payment Reminders Should You Send?
There is no fixed number of payment reminders that should be sent, but it is important to have a consistent approach. Generally, it is recommended to send 1 or 2 payment reminders before proceeding to a demand. It is not advisable to number your payment reminders. This lets the debtor know that multiple reminders will follow, making them less likely to pay after the first reminder.
Read more about sending a payment reminder.
What Do You Include in the Text of a Payment Reminder?
The text of a payment reminder should be professional and formal and include the following information:
- Company name and contact details: Make it clear who the sender is and how the customer can contact the company.
- Invoice reference: Add the invoice number or reference so the customer knows which invoice is being referred to.
- Payment date: Indicate the original payment date and mention how much time has passed since the invoice was issued.
- Amount: State the amount of the outstanding invoice and the payment method (e.g., by check, direct debit, online payment).
- Thank you: Thank the customer for their timely attention and ask them to contact you if they need help paying the invoice.
- Signature: Add a signature from a responsible employee of the company.
Free Sample Payment Reminder
An example of a payment reminder is:
Dear Sir/Madam,
Our records show that the following invoice has not been (fully) paid.
[Invoice]
We kindly request you to transfer the outstanding amount of €.. to [bank account number]. Or pay via the iDEAL button in this invoice.
If your payment is already on its way, you can consider this reminder as not sent.
Kind regards,
[Company]
For a final reminder, the tone is slightly stricter, for example:
Dear Sir/Madam,
Unfortunately, despite previous requests, you have not yet paid the outstanding invoice amount. You have had ample time for this. You are currently in default of payment.
[Invoice]
We give you another 14 days to transfer the due amount of €… to [bank account number] or pay directly with the iDEAL button in this invoice.
If we do not receive the payment within the specified period, we will claim reimbursement of costs. In addition to the above principal sum, you will then owe collection costs and, if applicable, the statutory or contractual interest compensation.
The collection costs will amount to €… If the payment is not received within the previously mentioned 14 days, the invoice will be treated as a collection and we will hand it over. The 14-day period starts the day after delivery of this final reminder.
However, we hope that you ensure timely payment and that collection measures can thus be avoided.
If your payment is already on its way, you can consider this reminder as not sent.
Kind regards,
[Company]
Send Payment Reminder by Registered Mail or Email?
Whether a payment reminder should be sent by registered mail or email depends on the specific situation. Email is quick and easy, but it is not always clear whether the email has been received or read. Sending by registered mail provides more certainty that the payment reminder has reached the customer, but it is slower and more expensive.
Help with Sending a Payment Reminder
Payt offers support and help with sending payment reminders. Automate your accounts receivable management. This way, you benefit from the advanced functionalities of the platform, such as automatic reminders and demands, and real-time insight into payment status.
A payment reminder is an effective and necessary tool for businesses to quickly collect outstanding invoices. It is important to have a consistent approach and choose between sending by registered mail or email, depending on the specific situation. Payt offers help and support with sending payment reminders. This way, time can be spent on matters within your company that deserve personal attention.
