Payment Reminder for Invoices - Template and Rules
Unpaid invoice? Here is everything you need to know about payment reminders - from friendly nudges to formal collection.
When Should You Send a Payment Reminder?
Timeline for Follow-up:
Day 1 after due date: Friendly reminder
"We notice that invoice #123 was due yesterday. We assume this is an oversight."
14 days after due date: First formal reminder
Formal payment reminder with a new payment deadline.
28 days after due date: Second reminder
Warning about collection proceedings if payment is not received.
42 days after due date: Consider collection
Hand over to a collection agency or take legal action.
Late Fees - What Can You Charge?
The rules for late fees vary by country, but here are the general principles:
Reminder Fees
- Most countries allow a reasonable reminder fee per notice
- The fee should be stated in your original payment terms
- Typical fees range from USD 5 to USD 15 per reminder
- Some countries cap the total number of fees you can charge
Late Payment Interest
- Typically calculated as the central bank rate + a percentage (often 8 percentage points)
- Calculated from the original due date
- Applies automatically for B2B transactions in many jurisdictions
- For consumer transactions, terms must usually be agreed in advance
Collection Costs
- Regulated by local debt collection laws
- Depend on the size of the claim
- Added by the collection agency
Template for First Payment Reminder
PAYMENT REMINDER
To: [Customer name]
Date: [Date]
We refer to invoice no. [number] with due date [date].
We have not yet received payment for this invoice.
We kindly ask that the amount of [currency] [sum] is paid at your earliest convenience.
Original invoice: [amount]
Reminder fee: [fee]
---------------------------------
Total due: [total amount]
Bank account: [account details]
Payment reference: [reference number]
New due date: [date + 14 days]
If payment has already been made, please disregard
this reminder.
Kind regards,
[Your name/company]
Template for Second Reminder (Collection Warning)
COLLECTION WARNING
To: [Customer name]
Date: [Date]
Despite our previous reminder, we have not received payment
for invoice no. [number].
If payment is not received by [date], the claim will be
referred to a collection agency without further notice.
Original invoice: [amount]
Reminder fee (1st): [fee]
Reminder fee (2nd): [fee]
Late payment interest: [amount]
---------------------------------
Total due: [total amount]
Bank account: [account details]
Payment reference: [reference number]
Payment deadline: [date]
[Your name/company]
Tips for Effective Payment Reminders
1. Be Professional
Keep the tone businesslike, even if you are frustrated. A professional reminder gets better results and preserves the customer relationship.
2. Make It Easy to Pay
Always include full bank account details and payment reference. The easier it is to pay, the faster you will receive the money.
3. Follow Up by Phone
Sometimes a phone call is more effective than a written reminder. Call and ask politely about the status.
4. Document Everything
Keep records of all reminders and all communication. This is essential if the case goes to collection.
5. Know Your Customers
Large, established companies almost always pay - they just need a reminder. New customers should be followed up more closely.
When Should You Consider Collection?
Hand over to a collection agency if:
- The customer does not respond to your attempts to make contact
- The customer refuses to pay without a valid reason
- More than 42 days have passed since the due date
- The claim is large enough to justify the cost
Small Claims Court
In many countries, you can pursue smaller debts through a small claims process:
- Usually inexpensive (filing fees vary)
- Does not typically require a lawyer
- Effective for undisputed debts
- Can lead to a court judgment and enforcement
Alternatives to Collection:
- Payment plan - Agree on an instalment arrangement
- Mediation - Use a neutral third party to resolve the dispute
- Write-off - If the claim is not worth pursuing
Prevent Payment Problems
The best approach is to avoid needing reminders at all:
- Send invoices immediately after delivery
- Have clear payment terms stated on every invoice
- Request advance payment from new customers
- Offer multiple payment methods
- Check creditworthiness for large amounts
- Use automatic payment reminders in your invoicing software
Professional follow-up of unpaid invoices is good business practice, not being pushy.