Introduction to asking for payment

There are many reasons business owners might incur overdue payments. 

For example, a customer might have lost their original invoice or simply forgotten to pay on time. These scenarios are why it’s important to learn how to ask for payment for the products or services that your company provides, including communicating payment terms clearly.

Whatever the reason for late payment may be, as per our expertise, you have to send a payment reminder email to get your customer to settle as quickly as possible. This involves following up on outstanding invoices.

However, sending a late payment reminder email to people is difficult. Especially if you’re worried about sounding rude or demanding to your clients. 

In this guide, you’ll learn a few tips for writing a direct yet friendly late invoice email and how to follow up when your customer fails to pay. 

Why is it important to ask for payment?

Drawing from our experience, following up on late payments keeps your cash flow healthy and is an excellent way to maintain a positive business relationship. 

And through our practical knowledge, when you follow up on late payments, you garner your customer’s respect without jeopardizing your reputation or finances when you hold your customers accountable. 

How to ask for payment professionally

To ask for payment politely and professionally from a client for the work completed, you must follow these steps:

Approach your customer for payment at the right time

Letting too much time pass after sending an overdue invoice significantly decreases your chances of getting paid. Politely requesting a payment a day after it’s due is a good idea – you never know when they might’ve just overlooked their outstanding invoices.

Check if your customer received an unpaid invoice

Before figuring out how to ask for payment again, make sure that you indeed have already requested payment.

You don’t want to follow up on an outstanding invoice only to find out you forgot to send one in the first place! This includes requesting a deposit or retainer upfront to secure the agreement. When sending payment reminders, make sure there were no miscommunications or errors on your end. A part of providing detailed invoices is asking the customer if they encountered any problems with receiving original invoice and sending them another copy if necessary.

Provide multiple payment options

Based on our observations, it’s possible that your customer hasn’t paid on time because they struggle to meet your payment options. Our investigation demonstrates that if you encounter this problem frequently, you might want to consider setting up a payment schedule and accepting multiple forms of payment like: 

• Credit card.
• Money order.
• Check.
• Online payment portal.

If you’re wondering how to request payments, payment reminder emails are the best way to do so. Based on our firsthand experience, a phone call or request for payment via text message are options, but will likely annoy your customer. 

What to include when asking for payment in a message

Our findings show that one of the most important elements in figuring out how to ask for payment is knowing what to include in your request.

When asking your client for payment in a message, make sure to include the following in your overdue invoice email. 

• A direct subject line: Let your customer know what the email is about from the get-go. Write something like: “Payment for Invoice # [Number].” Providing the invoice number in the subject line makes it clear what payment is overdue.
• A copy of the invoice: Save your customer the time finding your initial email by attaching a copy of your original invoice. Make sure this document includes the agreed invoice amount, due date, and project reference. As per our expertise, you can also highlight invoice information as a way of clarifying anything customers may overlook.
• Your payment terms: Reiterate your payment terms, including the payment process, accepted payment methods, your late payment fee, and any other relevant payment details. Enforcing late payment fees when negotiating payment arrangements is one of the most effective ways to ensure timely payments.
• Your bank account or payment provider information: Don’t leave anything to guesswork – make it easy for your customer to pay you by providing your complete bank account or payment provider information. 

Make sure that with each payment you receive, you record the client name and provide a receipt. This way, you ensure that there are no mistakes on your end before you request an overdue payment.

When to send a payment request email to a customer

Our research indicates that one important element to know how to ask for payment is knowing when to ask for payment.

You don’t want to let too much time pass before sending a reminding your customer of an unpaid invoice. Our investigation demonstrates that the best time to send your first reminder is when the invoice is due.

Your next question might be: how often should I follow up with a late-paying customer? Consider sending follow-up emails within regular intervals like: 

• The day after the invoice is due.
• A week after the invoice is due.
• Two weeks after the invoice is due.
• A month after the invoice is due.

The longer it takes a customer to pay you, the more you’ll have to adjust your invoice late fee wording. Be professional but make sure they know your request is urgent – be firm, direct, and list the consequences they can expect from non-payment.

What does it mean to be rude when asking for your payment?

Based on our observations, part of figuring out how to ask for late payment is learning how to do so in a friendly way.

Talking about outstanding payments is never a comfortable conversation to have. In some cases, professionals will fail to follow up for fear of being rude. So, how do you get over this fear and ask for the compensation you deserve?

Before you send your follow-up email, consider the following: 

• Is the project fully complete?
• Did you discuss your contract terms and methods before starting the project? 
• Are you asking for the agreed-upon amount? 

If you answered “yes” to all these questions, you could justify sending your customer a polite reminder about their payment. When being professional in your request letter, the most important thing to keep in mind is not to make things personal – don’t discuss why you need to be paid on time or how on-payment affects your business. Focus on making a clear demand and providing helpful information.

Dealing with late payments

When dealing with late payments, consult your payment terms. Remember to log the payment in your system, and follow up with your client. 

Your payment terms will likely include a protocol for late payments, like one that is interest-based. If so, ensure your customer’s late payment includes this additional fee. Otherwise, you’ll have to follow up again.

Payment follow up email

Are you unsure of how to word your follow-up email reminder? Use this email template for reference.

“Hi there [Name],

We hope this email finds you well. We understand that it may be a busy time, but we wanted to remind you of your outstanding payment on invoice # [number] due [date]. We have attached an additional copy of the invoice for easy reference. 

If you have any questions regarding your payment, please don’t hesitate to reach out. We are happy to answer any of your questions. 

Thank you in advance,

[Your name]”

Our findings show that many companies use an invoice template to save time, but email templates improve efficiency as well. Hopefully this sample letter for payment reminders proves useful for you. 

How to ask for payment if you’re still not getting paid?

Your method of how to ask for payment will be different if you have trouble reaching your customer. In the worst-case scenario, you might not get a response from your customer at all. While it can be frustrating, taking a more direct approach can work to your advantage. 

Speak to the customer by phone

Drawing from experience, phone calls are harder to ignore compared to emails. If you can get your customer on the phone, they can’t dodge any questions or make up excuses. Plus, they might’ve simply overlooked your invoice email and just need a stronger nudge.

Consider cutting off future work

If you have other ongoing projects with your non-paying customer, pause existing work to reinforce their overdue invoice as an urgent problem. Pausing work can also mitigate the risk of going an additional few months without payment.

Research collection agencies

If a customer still refuses to pay, you may have no other option but to consult a collection agency. However, remember that using a collection agency should be your last resort, and through our practical knowledge, collecting payments this way will likely ruin your business relationship. Also, note that debt collectors will typically keep a percentage of the money they get back for you.

What if your backup plan doesn’t work?

Based on our observations, if none of the above tips work in your favor, now might be the best time to consider legal action. Some legal options for non-payment include: 

• Placing a lien on your customer’s business.
• Going to a claims court or debt collection agency.
• Filing a civil case for larger amounts.

For corporate customers, you can also file complaints at institutions like the Better Business Bureau. These organizations specialize in things like speeding up overdue payments.

Tips and strategies for getting paid on time

Although it’s good to know how to ask for payment in case you do end up in a situation where your customer’s payment is overdue, based on our firsthand experience, it’s best to avoid getting into that situation in the first place.

One of the best ways to avoid chasing a payment that is days or weeks overdue is to make sure your customers pay on time from the beginning. Aside from offering discounts for early payments, here are a few tips for helping your customer avoid missing a payment deadline.

Provide the customer with precise records of your work

Keeping detailed and accurate records of your projects means you’ll always have proof of when you need to receive payment from customers. Using timekeeping software helps you keep detailed track of your billable hours and send these reports to your customers whenever necessary.

Pick a great payment processor

As much as possible, you’ll want to introduce multiple payment options to make it more convenient for customers to pay you. With more options on the table, customers are more likely to pay upfront and have no excuse for non-payment. 

Popular payment processors that are easy to deploy and require low transaction fees include PayPal and Stripe, which are available internationally. 

These services debit your client’s accounts and credit yours automatically. This resolves customer hesitation over the payment process.

Invoice efficiently

While you shouldn’t judge a book by its cover, our findings show that customers are more likely to pay businesses that provide clean and aesthetically pleasing invoices. When invoices are inaccurate and hard to read, customers may become discouraged from settling them or following up to ask questions. 

An invoicing tool can help keep your documents consistent and automatically save information for repeat customers. Automated tools can also reduce the risk of human error and provide quick reminder options through email, phone calls, or SMS.

Draw a contract

Our research indicates that invoices are not legally binding, but contracts are. To avoid any issues regarding future invoicing, thoroughly outline your payment policy through a contract agreement. A solid contract should include the following information: 

• The parties involved (you and your customer).
• The scope of the project.
• The date for project delivery.
• Payment terms and methods.
• Penalty fees in the case of late payment.
• An outline of potential legal action in case of a dispute.

While a comprehensive contract doesn’t guarantee on-time payment, our investigation demonstrates that it’ll make customers less likely to deviate from your payment schedule.

Ask for an advance deposit

Sometimes, it’s hard to scope out the customers who are willing to pay from those who aren’t. 

One of the best ways to determine whether a customer is willing to compensate you fully and on time is to impose an advance deposit or down payment. This amount is up to your discretion, though our findings show that most freelancers and businesses are charging a down payment of 40% and 50% of the final bill.

Once partial funds are deposited into your account, your client is less likely to evade a full payment. 

If you think a higher advance deposit might scare away your customers, you can consider decreasing this number or asking for incremental payments when you achieve specific project milestones. It might take some experimentation to find the right balance for your business’ finances.

Download your invoicing email templates for free

Unsure of how to word your payment follow-up email?

Use these free email templates to send invoice follow-ups and payment requests to your customers.

If you don’t see the download form, download template here.

Get your template

Key takeaways

Knowing how to ask for payment is a key skill for every business owner. When sending a payment reminder letter, you can avoid being rude by using firm yet friendly and professional language. To ensure that you reach the goals you want, take precautions to provide all the information your customer needs to pay you on time. 

Are you looking for a better way to keep track of your customers and what they owe you? Method CRM is an all-in-one CRM solution that syncs with QuickBooks. Try it now and make handing out invoices easier than ever!

How to ask for payments FAQs

What is the process for requesting payment?

The process for requesting payment varies between organizations, but it generally consists of the same fundamental steps. To request payment:

• Consult your invoice agreement and terms of payment.
• Draft a message that outlines the conditions of the invoice and requests payment.
• Deliver the message through your client’s preferred means of communication.

What is the most professional way to ask for payment?

The most professional way to ask for payment is through an email or direct letter reminder. Make sure this letter is:

• Clear and concise.
• Polite.
• Timely.

Where do I keep track of payments?

Keeping track of payments is a crucial part of every business. There are a few ways to do so, but the best is to use CRM software like Method CRM. 

With Method CRM, you easily keep track of everything that goes on in your business within a single interface, including payment history. Better yet, schedule automatic alerts and reminder emails when an invoice is overdue with Method CRM.

Get paid on time, every time, with Method CRM. See how!

Image credit: Towfiqu Barbhuiya via Unsplash

Did you know that over one-third of invoices are paid late? Unfortunately, there are many reasons you might have to chase a late payment, such as: 

• Lost invoices.
• Limited payment options.
• Poor budget-setting. 

The good news is that setting clear invoice payment terms can help you get paid faster. In this guide, you’ll learn how to control your cash flow better and get paid on time by incorporating clear payment terms in your invoices.

What are the payment terms on an invoice?

Invoice payment terms outline when and how you want to be paid. These typically include a detailed description of your arrangement, including:

• Your preferred payment method (i.e., credit card, payment portal, or cash on delivery).
• Late payment fees and policies.
• Accepted currencies.
• Due dates.

Why are invoice payment terms important?

Payment terms keep customers accountable for what they owe you and ensure that your cash flow stays healthy. Here are a few other ways they can benefit business owners.

Control when you get paid

Payment terms tell your customers exactly when you expect to receive on-time payments. Ideally, they ensure that you get prompt payments without inconveniencing your customer. Most small businesses and freelancers enforce net-30 payments that are due 30 business days from the invoice date. 

Make payment terms part of your contract

Including payment terms in your contract ensures that they are legally binding. If your customer fails to settle their unpaid invoice within the agreed period of time, you can take your customer to court. Discuss these terms with your customer before signing the contract to level expectations.

Predicting payment means healthier cash flow

Most freelancers and small business owners will often struggle with overdue payments. Fortunately, setting effective invoice payment terms and facilitating online payments can make it more convenient for your customer and ensure positive cash flow. 

Knowing when you can expect a monthly payment also helps you budget and determine when you are most liquid. 

How long should you give someone to pay an invoice?

Historically, net-30 is the most common payment term. These grace periods are popular because they allow businesses to run monthly checks and make income more predictable. However, several factors can impact the terms you ultimately set, such as:

• The scope of the project.
• The total invoice amount.
• Customer’s payment history.

For instance, for longer-term projects with a higher invoice amount, requesting a partial payment in two sums might be more convenient for you and your customer. Alternatively, you can settle for a longer payment period such as net-60 or net-90.

What are the best invoice payment terms for businesses?

Carefully set terms ensure faster payment. If an on-time payment is something you want to achieve, consider incorporating these terms into your invoice.

Shorter terms

While most standard payment terms enforce a payment period of 30 days, online payments have made it easier for customers to settle their bills. Take advantage of this by setting shorter terms between 15 and 30 days.

Late payment policy

Enforcing a late fee penalty encourages customers to make their payment in advance or at least on time. However, be sure to discuss your overdue invoice policy beforehand, including details in the final contract. 

Most freelancers and small businesses set a late fee interest rate of between 1% and 1.5%.

Several methods of payment

Having more than one payment method makes it easier for your customer to pay and increases your chances of them settling an invoice on time. If you only accept credit card payments, you might want to consider introducing more options like:

• Money order.
• Check.
• Debit card.
• Cash.
• Payment portals.
• Bank transfers.

You can also consider allowing customers to set up an automatic monthly credit payment every time you send invoice balances.

Incentivized early payment

Offering payment discounts to customers who settle their bills early can incentivize them to always be on time. Most businesses offer a 2% discount for customers who pay within ten days of receiving their invoice.

How to choose invoice payment terms for your business

To avoid payment delay and encourage your customers to settle their invoices on time, setting the right terms matters. Here are some best practices to keep in mind.

Cash flow considerations

While you want to carefully consider your customers’ needs when setting your expectations for payment, you also have to prioritize cash flow. Set payment schedules that keep your cash flow steady and predictable while keeping things manageable for your customers.

Industry considerations

Terms for payments will vary depending on the industry. For instance, while most industries will adhere to a net-30 standard, the construction industry is more used to a net-90 cash basis. On the other hand, most landscapers send net-7 invoices. While not as common, there is also a billing option for 21 days.

Customer history

If you provide ongoing services to a specific customer, you can set invoice payment terms according to their payment habits. For instance, if they tend to incur an outstanding balance frequently, you might want to consider setting shorter deadlines or request a down payment.

However, more complex projects might make it difficult to allow shorter payment terms, so you’ll want to consider making a payment request for milestones instead.

Size of the invoice

The larger the invoice, the more time your customer should have to make up the funds to pay you. If working on a big project with a new customer, consider asking for an upfront deposit to avoid non-payment.

What to include in your invoice payment terms

The payment terms you set and how you iterate them will influence how quickly you get paid. So, what should you include in your contract? Let’s take a look.

Invoice due date

Other than the invoice amount, the most important piece of information to include in your contract is the due date. There are two ways to outline a due date: 

• Provide a specific due date, which is the day you expect to receive the payment.
• Provide a net date, which is how many days your customer has to pay upon receiving the invoice balances.

Terms of sale (TOS)

The terms of sale (TOS) between buyers and sellers typically include the following:

• Chosen payment method.
• Cost per product or service.
• Invoice amount.
• Invoice date payment or net due date.

Sales tax

Depending on where you supply your customers, expect to fulfill Federal Goods and Service Tax (GST). Here is a list of sales taxes according to your Canadian province or territory.

• Harmonized Sales Tax (HST): Ontario, Nova Scotia, New Brunswick, Labrador, Newfoundland, and Prince Edward Island.
• Provincial Sales Tax (PST): Manitoba, British Columbia, and Saskatchewan.
• Quebec Sales Tax (QST): Only in Quebec.

Currency

If you offer your products and services to international customers, you’ll have to agree on a currency to transact with. Accounting software like QuickBooks Online provides multi-currency support that automatically reflects exchange rates.

Recurring payments if ongoing

If your business provides subscription-based products or services, recurring methods of payment can make it easier for customers to settle individual invoices.

Improving your invoice payment terms

As your business operations change, so will your professional invoices. When reviewing your invoice templates, make sure to apply the following tips:

Keep them short and concise

Especially if you accept various methods of payment, keeping the language on your invoices simple can make things clear and prevent miscommunications.

Send your payment request on time

Do you want to process payment right away? Send your invoice as soon as possible so your customer doesn’t forget to settle.

Say please and thank you

While it may seem obvious, using polite and professional language can help you avoid a payment delay. Customers love to feel appreciated and valued — playing to this will get you paid faster.

Be realistic and flexible

Like any business owner, you probably want to get paid as soon as you close up a project. However, circumstances may not always be ideal and you don’t want to put unnecessary pressure on your customer. So, be realistic and make it easy for customers to pay you by offering more than one efficient payment option. 

If you offer limited methods of payment, consider introducing something new like bank payments, mobile payments, or credit card payments if these aren’t already on your roster.

What payment methods should you accept?

One of the easiest ways to make accurate cash flow projections and get paid on a regular basis is to offer more than one collection method. Some commonly accepted payment methods include:

• Credit cards.
• Cash.
• Third-party online banking service.
• PayPal or Stripe.
• Check or money order.
• Bitcoin or other cryptocurrency.
• Payment via mobile device.

Download your invoicing email templates for free

Unsure of how to word your payment follow-up email?

Use these free email templates to send invoice follow-ups and payment requests to your customers.

If you don’t see the download form, download template here.

Get your template

Invoice payment terms: Key takeaways

Deciding on your payment settings can spell the difference between receiving your pay on time or having to chase down customers with a follow-up payment request. 

While there are many ways to get your scheduled payment on time, incorporating clear payment terms and more than one collection method can help your cash flow tremendously.

Are you looking for a better way to organize your accounting records and individual invoices? Method is the software for accounting professionals that keeps your invoice payments on track!

Set clear invoice payment terms with Method CRM. Start your free trial today!

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Whether you’re a small business owner or enterprise manager, late payments can bring consequences to your bottom line. It can be tempting to let it slide, especially if you want to avoid confrontation. But as a business, getting paid is necessary, and you often don’t have a choice but to follow up on your late payment.

While sending an overdue invoice email to a client can be uncomfortable, as per our expertise, it’s the best way to get your due balance. In this guide, you’ll learn how to write an overdue invoice email and get must-know tips for following up.

What is an overdue invoice email?

An overdue invoice email – or past-due invoice email – is a message you send to customers who have not met payment terms. This email will include vital information, such as: 

• Invoice details such as the invoice number.
• The amount of the overdue payment.
• Number of days overdue.
• Instructions for moving forward with the late payment.

Why do you need to send overdue invoice emails?

Past-due email reminders are a way to ensure that customers stay true to their commitment and keep your business’ cash flow healthy. Our findings show that they also help you maintain healthy relationships and increase your chances of repeat business with the right customers.

These emails are a quick solution to a missed payment issue. Overdue invoices are often a matter of clients overlooking or forgetting about their invoice. Or there could be an issue with their accounts.

And based on our observations, when business owners don’t hold their clients accountable, their small group of non-paying customers grows.

When should you send an overdue invoice email?

Drawing from experience, the time you send a polite email reminder is nearly just as crucial as sending one at all. But what should you consider the right time?

Our research indicates that some of the best times for businesses to send late payment reminder emails are: 

• The day after the invoice is due.
• A week after the invoice is due.
• Over the weekend, when you have less competition for your customer’s attention.

If there’s no response, keep trying to touch base with your client. 

You can also include how overdue the invoice is in your subject lines. This implies urgency which often results in quicker payment.

Once enough time’s passed that you’re confident they won’t pay for your product or services, it might be time to get a legal team involved. 

Drawing from experience, if it’s in regards to a valuable customer like a partner, you might want to give a bit more leeway with late payments. So make sure to double check the client name before reaching out.

When your customer does pay, make sure to still send a receipt and email saying thanks. 

Keep reading this blog for more ways to make sure you get paid what you’re owed for your products.

How to write a polite payment reminder email

If this is your first time sending a reminder email for a past due invoice, keep these steps and email templates in mind. 

1. Mention the invoice in the email subject

One of the best ways to capture your customer’s attention is to reference the invoice in the email subject line. Include your company name for some context. For example:

“Subject: [Company_Name] Invoice [Invoice_Number] Overdue Notice.”

2. Include a polite opening

In the best-case scenario, your customer won’t need more than a quick and polite reminder to settle their bill. Maybe they just haven’t checked their accounts payable in a while.

As such, you’ll want to begin your overdue email with a polite greeting, which maintains the possibility of future contracts. Establish a friendly and positive connection by referring to them with a preferred name and giving them a gentle nudge regarding their purchase. For instance: 

“Dear {{client name}},”

I hope you are doing well! This is a friendly reminder that your invoice [number] sent on [date] was due [date]. We understand you must have a busy schedule but would greatly appreciate it if you took a moment to look over the invoice.”

3. Reference the due date and amount

Based on our observations, if your customer does business with other suppliers, it can be all too easy to get lost in a sea of invoices. To avoid any confusion, you’ll want to include as much information as possible, such as: 

• When you sent the invoice.
• When the invoice was due.
• The invoice amount due.

You can emphasize essential details in your outstanding invoice email by highlighting them in bold or italics.

4. Explain payment options

Remind your customer that settling overdue invoices can be simple by highlighting the payment options you accept. If you have an online payment portal, make sure to include this in your email. Our findings show that payment services that debit accounts directly have a better chance of getting you the money you’re owed.

Similarly, include a mailing address to send a check or money order if you offer these options. The simpler you make transactions, the more likely you are to receive the funds.

5. Specify the next steps

Based on our firsthand experience, one of the best ways to avoid non-payment is to make the next steps clear in your reminder email. 

You’ll want to state your late fee policies and consequences for non-payment. Especially when following up with a customer who has incurred outstanding invoices before, or if they have multiple invoices overdue. 

In these cases, you might want to charge interest or a one-time late fee.

If necessary, you may have to outline potential legal action. Here’s an example:

“This is to remind you that we enforce a late payment fee of $X, and failure to settle will require us to close your account for referral to a collections agency.” 

What if payment request emails for outstanding payments don’t work?

The payment request email you send after one day won’t be the same as the one you send after two weeks. If your customer fails to settle an outstanding payment for longer periods, here are a few tips for tailoring your invoice late fee language according to the situation.

One week late

If there’s no response after your initial late payment reminder, it’s time to consider a 2nd email. 

While you want this additional payment reminder email to still be polite and friendly, you’ll want to start firming up your tone and being more direct at the one-week mark. Get to the point quickly and state your late fee policy clearly. Also, include another copy of your invoice.

Consider this overdue payment reminder email template: 

“Hello [customer Name],

As per our records, you still have not settled your payment on invoice # [number], which has been overdue for seven days. If you have already sent this payment, please disregard this email. Otherwise, we have attached an additional copy of the late invoice for your reference. 

For added convenience, here are our payment options and a breakdown of our late policies.” 

Two weeks late

At this point, a late invoice unsettled for more than two weeks may require an additional payment reminder email and a phone call. On top of this reminder, ask your customer to confirm whether they have received your message, prompting them to reply urgently. Through our practical knowledge, it’s possible that your messages were sent to their spam folder.

Use this template for your letter: 

“Hi there [customer Name],

I have emailed you several times regarding your invoice # [number], now overdue by two weeks. We have attached another copy of your invoice in case it was lost or deleted. If you have any further questions about payment, please don’t hesitate to reach out. 

Please be reminded of our late policy and reply to this message to let me know you have received it.” 

One month late

Missing a payment deadline by a month can significantly hurt your bottom line, so don’t hesitate to take a firmer, tougher approach. As per our expertise, to get your client to take their past due invoice more seriously, communicate the consequences. 

Specify any new charges to your client, especially if you plan to enforce late fees. If you are working on other ongoing projects with the same customer, let them know you will have to put a halt on tasks until they can settle all late invoice payments. 

Remember, you want to be firm but not personal or accusatory. Keep things formal, and never undermine your professionalism by making sweeping statements. 

Consider sending a similar message:

“Hi there [Name], 

This is to remind you that invoice # [number] has not yet been settled and was due 30 days ago. Please be aware that outstanding invoices more than 30 days late may incur additional fees. 

Please don’t hesitate to reach out if you have any questions. Otherwise, we can arrange payment terms that work for you.”

60 to 90 days late

Between 60 and 90 days of following up on your original invoice is when you might want to start considering turning the account over to a collection agency by a specific date. Make sure to let your customer know if you plan on making a claim.

Here’s a letter sample: 

“Hello [Name],

This is to let you know that we still have not yet received payment for invoice # [number] and will require immediate attention. We have reached out several times requesting payment, and have outlined all the relevant payment details. 

Please be aware that if you cannot settle the invoice for the amount of [amount] due on [date]. If you cannot settle the outstanding balance by [final date], we will have to refer your account to a collection agency.”

How to prevent late payments in the first place

While your business can suffer from late payments, sending friendly payment reminder emails can still be an uncomfortable process. After putting it to the test, the best way to avoid having to follow up on a past-due payment is to prevent late payments from happening in the first place. 

Our findings show that you avoid late payments when you:

• Are clear about your repayment time frame.
• Outline your late payment policies, including any late fees.
• Send reminders before an invoice is due.
• Provide your product or services only after you receive payment.
• Charge a retainer fee as insurance.
• Give clients easy access to make transactions from their bank accounts to yours.
• Provide a site for clients to pay easily, like a customer portal.

Download your invoicing email templates for free

Unsure of how to word your payment follow-up email?

Use these free email templates to send invoice follow-ups and payment requests to your customers.

If you don’t see the download form, download template here.

Get your template

Overdue invoice email: Key takeaways

Nobody wants to deal with an invoice that is weeks overdue. However, based on our firsthand experience, following up with your customers is necessary, especially if you want to keep your cash flow healthy. If tracking that money down is an uncomfortable experience for you, we hope these tips on how to write an overdue invoice email have helped.

As per our expertise, running a business and keeping track of your expenses can be challenging, but using a QuickBooks CRM such as Method CRM can streamline your workflow. 

Overdue invoice email FAQs

What is the outstanding balance?

An outstanding balance is the amount of money that is owed in a given transaction. So, if you’re sending an overdue invoice email, you’re requesting that your recipient pays their outstanding balance.

How many overdue invoices are there?

Our findings show that the amount of overdue invoices you have is totally circumstantial. Drawing from experience, though it’s good practice to keep a record of all your unpaid invoices, as they can prove detrimental to the financial health of your business. 

How do you calculate late fees?

There are a few ways to calculate late fees. Depending on your late fee policy, you may opt to charge based on interest or a lump sum.

To calculate based on interest, multiply your interest rate by the number of days the payment has been overdue.

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If you run a startup or large enterprise, you know that dealing with outstanding invoices significantly impacts your cash flow. While sending a payment request email can put you in an uncomfortable situation, it’s often necessary. Still, getting customers to pay on time is the key to avoiding awkward conversations about late payments.

If you want to keep your cash flow healthy and settle your invoices on time, you’ll learn everything you need to know in this guide.

What is an outstanding invoice?

An outstanding invoice pertains to a sales invoice that a customer has yet to settle. Also known as an original invoice, this document will typically dictate a business’ payment terms, stating when a customer is expected to pay. For instance, an outstanding invoice might set payment terms of net-30, which means a customer has 30 days to pay their bill.

Why is it risky to have outstanding invoices?

Too many outstanding invoices don’t reflect well on any customer. A business owner with multiple unpaid or late invoices can ruin their business credit or get banned from placing new orders to various vendors.

In the worst-case scenario, a customer’s collection of unpaid, online invoices might be sent to a collection agency and face legal consequences.

Difference between outstanding and past-due invoices

Contrary to popular belief, “outstanding” and “past-due payments” are not interchangeable. Outstanding invoices pertain to all unpaid bills, while past-due invoices are unsettled bills past their deadline. As much as possible, customers should ensure that their outstanding invoices don’t become past due.

Collecting outstanding invoices

If you work with customers who frequently incur past-due payments, these tips can help them stay on top of their bills and prevent negatively impacting your cash flow.

• Provide clear terms and payment methods: The best way to ensure you get paid on time is to make it easy for customers to settle their bills. Include complete information such as due dates, invoice amounts, and payment methods.
• Send reminders before the due date: Busy customers will sometimes lose invoices under a mountain of emails. Send a friendly reminder a day or a few days before the invoice is due to ensure yours doesn’t become forgotten.
• Send a physical invoice: While the best way to send an invoice nowadays is digital, going old-school can provide your customer with a concrete reminder that they have an outstanding payment due.

How to follow up on overdue invoices in a professional manner

Invoices can quickly become lost under a sea of other documents, especially if you send paper invoices. So, if your customer hasn’t settled their bill, give them the benefit of the doubt and follow up professionally. If your customer’s unpaid invoice is only a few days late, you can follow up by: 

• Sending a friendly follow-up email.
• Giving your customer a quick call.
• Mentioning their invoice payment in a meeting.

Pursuing legal action might not be necessary at this point in the process.

How to write a polite payment reminder email

When sending email reminders for an outstanding invoice, you want to be aware of your timing. Send the email a week in advance, and you could risk getting your request buried under hundreds of other emails. The best time to send a reminder email is the day before an invoice is due – this keeps your deadline fresh in their minds.

When writing your email, include the following essential information: 

• The invoice number.
• Your company name and project title.
• The invoice amount.
• The due date.
• Your payment terms and payment methods.

Keep your language direct but friendly to ensure repeat business in the future. Consider using payment reminder email templates, such as the following. 

“Hi there [Name],

We hope this message finds you well. This is to remind you that your payment for invoice # [number] worth the amount of [amount] is due on [date].

These are our accepted payment methods: [list methods]. Should you have any questions regarding your invoice, please don’t hesitate to reach out.

Sincerely,

[Your name]”

How to get paid on time for outstanding invoices

Late payers can significantly impact your cash flow, so how do you get them to pay on time? Here are a few tips for avoiding delinquent customers.

1. Have a late payment fee on your invoices

If your customer is already struggling to pay their existing bill, chances are they’re not going to want to rake up more charges. Clearly stating a late fee in your payment policy can encourage them to pay on time – or even pay early.

2. Write a request letter or email

If your customer fails to settle their invoice on time, the first thing you want to do is send a request letter or email. Keep your tone professional and friendly yet firm. Include all the necessary information to make settling their bill easy.

3. Send an overdue invoice

Chasing an invoice that is weeks overdue can be a nuisance, but your persistence should hopefully get your customer to pay close attention!

4. Send a statement of accounts

You can put things into perspective for your customer by sending them a statement of accounts, reflecting all the outstanding invoices.

5. Make a phone call

In some cases, getting your customer on the phone is more effective than sending multiple emails. Plus, phone calls are much more difficult to ignore. When you get your customer on the phone, politely remind them of their overdue payment and reiterate any details you’d include in an email. 

6. Cut them off until the invoice is paid

Keep your business sustainable by halting all projects with non-paying customers until they settle their existing invoices. 

7. Hire a debt collector to go after your unpaid invoices

A debt collector can easily get your money back in the worst-case scenario, but most will take 25% of the cut. Resort to hiring a debt collector only if you are ready to cut ties with your customer – they likely won’t want to do return business after dealing with any legal consequences.

8. Involve a lawyer

A debt collector might fail to get your money back in rare cases. If you experience this, it might be the right time to consult with a lawyer who can deal with sole traders, partnerships, companies, and other business entities. However, hiring a lawyer can quickly become expensive and complicated, so this should be your last resort.

What is the standard late fee on an invoice?

Late fees on overdue invoices might vary from state to state, though most freelancers and small businesses charge a 1.5% monthly interest. If you’re not sure how much to charge for an unpaid invoice, consult with your state laws. Larger enterprises might charge a late fee of 2.5% to 5%, depending on the cost of the project and payment terms.

Outstanding invoices: Key takeaways

While chasing late payments can be a chore, it’s often a necessary evil for businesses that want to keep their cash flow healthy.  Hopefullytips listed above can help you settle overdue notices and prevent late payments in the first place. 

Do you want to keep better track of your customers and what they owe you? Method CRM is a comprehensive CRM platform that integrates with QuickBooks and streamlines your entire workflow!

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After wrapping up a project, the next logical step is to send your customer an invoice email. Knowing how to write an email with invoice attached helps you get paid on time. That’s where a well-written invoice letter comes in handy.

In this article, we’ll explain need-to-know tips to help you can learn: 

• How to write an email with invoice attached.
• What to include in your invoice emails, with example templates.
• Ways to increase your chances of getting paid.

What is an invoice email?

Email invoices reflect the amount a customer owes a business for their services rendered. It is helpful for accuracy in: 

• Accounting.
• Inventory.
• Filing taxes.

What to include in invoice emails

An invoice message should specify all the information your customer needs to know to pay you on time. These things include:

• Invoice number.
• Total amount due with the due date (in Net D format).
• Itemized list of goods and services (with corresponding rates).
• Payment terms, including policies for late payments, if applicable.
• Additional payment methods with payment instructions.
• Client name and business information (business name, address, phone number, email address, etc.).

How to write an email with invoice attached

Below are a few tips on how to write an email with invoice attached to get you paid more consistently:

Keep your invoice email professional and simple

Your invoice letter shouldn’t include unnecessary bells and whistles. Focus on providing your customer with the relevant payment details and a brief greeting with a professional tone. At the end, thank the recipient for their business or partnership.

Express each point in as few sentences as possible. The easier your invoice is for your recipient to process, the more successful payments you’ll get.

Have a descriptive subject line

Make sure it’s clear that you’ve sent an invoice in your subject line. Your customer should immediately know why you’re contacting them.

Drawing from our experience, you should also mention the invoice number in the subject line to make it easy to search for later. To give you an idea, here’s an example:

“Invoice # [Number] for [Project] Due [Date]”

Consider using an invoice template

If you’re not sure how to write an email with invoice attached, consider using invoice email templates to get started. 

Sending an invoice to your customer’s email address shouldn’t take more than a few minutes, so you can quickly update these custom invoice templates with the appropriate details — without making one from scratch every time.

Make sure your invoice includes important details

Make it easy for your customer to pay you by including all the necessary information, such as:

• Your preferred payment method.
• Invoice amount.
• Due date.
• Your policies (i.e., payment terms).

If you have a late fee policy, outline this before you sign your agreement. Most freelancers and small business owners charge an interest rate of 1% to 1.5%, while larger, more established companies might charge 2% or higher.

Include the invoice as an attachment

Instead of including your invoice in the email body, send it as an attachment. Use a PDF attachment that your customer can print or share digitally.

Before sending your invoice

Creating a standardized invoice you can rely on for every customer is difficult. Through our practical knowledge, we recommend ensuring the following before you send your invoices:

• The invoice format is simple enough to scan quickly without missing key information.
• The email recipient is addressed by name.
• Ensure the attached invoice is the correct version.
• Update the recipient on any future changes or announcements.
• Clarify any terms that might be confusing.

How to write a cover letter for an invoice

While business invoice emails are generally straightforward, complex projects might require a more formal cover letter. Including an invoice letter justifies your charges and can set your business up for regular work with a high-paying customer through personalized messaging.

In your invoice letter, enclose details such as:

• Your business background.
• The full scope of your services.
• A breakdown of the project scope and timeline.

How to send invoices through email

When sending an invoice by email, it’s best to attach it as a PDF file for easy sharing and printing. If you don’t want to create invoices manually, you can generate them from templates using accounting software. Software like QuickBooks Online syncs with your existing email providers.

If your primary payment method is through a gateway like PayPal, you can use its basic invoice generation features.

Following up on your invoice email

Sometimes your original invoice becomes an overdue invoice, which leaves you with the task of following up. This can happen for several reasons, such as your monthly invoice ending up in your customer’s spam inbox or getting lost under a slew of other emails.

How to write an email with invoice attached might differ from your initial message when you’re addressing an overdue account. For example, your wording might be a bit more urgent when following up. 

When writing your overdue invoice letter, be polite but firm and concise. There’s no need to clarify why you need to be paid as soon as possible.

If your customer has a history of non-payment, keep track of payments they have yet to settle and present them together. Keep reading for an example template of a professional follow-up email.

Alternate ways to send an invoice

Most businesses send an invoice by email, though there are other methods of sending one. If you use invoice-generating software, you might have the option to send one through the software via an online portal.

Alternatively, you can send your invoice over snail mail, though this may not be the best option if you take online payments.

Example templates for invoice email with attachment

Email invoice template

Now that you know how to write an email with invoice attached, you’re ready to put the body of your email together.

Address the recipient professionally and courteously. Clearly state the purpose of the email and attach the invoice as a PDF file to the email. Describe any attachments other than the invoice if there are any.

Also, be sure to: 

• Mention the invoice number.
• Specify the payment due date.
• Include payment methods and instructions. 
• Encourage prompt payment to avoid late fees. 

At the end, express gratitude for their business and provide contact information for any questions or concerns.

Below is a template for how to write an email with invoice attached separately.

For example:

Email Subject: Invoice # [Number] Due [Date]

Dear [Customer Name],

I hope this message finds you well. Please find your invoice #12345, due on [Date]. You can pay it by clicking the link in the invoice attachment. Your prompt payment is appreciated.

If you have any questions, please reach out to me at the email or phone number listed below.

Thank you for your continued business.

Regards,

[Your Name]

[Your Company Name]

[Contact Details]

Follow-up invoice email template

Based on our past experiences, you should send a follow-up if you don’t receive a response within a certain timeframe. When you send this is flexible, and could be anywhere from a week from sending out the first email to three business days before the payment deadline.

With politeness and clarity, reference the original invoice date and gently remind the customer of the pending payment. This acknowledgment request is often all it takes to prompt a customer into paying their invoice on time.

For example:

Email Subject: Invoice # [Number] Due [Date]

Dear [Customer Name],

I hope you have been well. This invoice notification email is to remind you that you have an outstanding balance of [Amount] that is due on [Date]. For easy reference, I have re-attached the invoice.

A late fee of [Money Amount] will be charged if payment is not made by the due date of [Date]. To avoid this late fee, please make the payment on time.

Please let me know if you have any questions or concerns, and I wish you all the best.

Regards,

[Your Name]

[Your Company Name]

[Contact Details]

Overdue invoice email template

When an invoice is overdue, use language that is firm, but professional. Highlight the overdue status and request immediate attention. Reiterate the importance of timely payment for continued services.

For example:

Email Subject: Invoice # [Number] Past Due [Date]

Dear [Customer Name],

I would like to notify you about invoice #12345. As the payment due date was [Date], your account is now considered past due. I would like to request your urgent attention to this matter to avoid any service disruptions.

A late fee of [Money Amount] will now be applied to your account. Attached is the updated invoice with this fee included. If I do not hear from you by [Future Date], you will unfortunately lose access to our services.

Should you have any questions, please contact me immediately at the phone number or email address listed below.

Regards,

[Your Name]

[Your Company Name]

[Contact Details]

While there is no perfect template for writing an overdue email, this basic guide helps get you started.

How to avoid unpaid invoices

To minimize the risk of unpaid invoices, outline clear payment terms from the beginning and consider a payment policy that includes late fees. Based on our observations, regular communication and reminders as due dates approach are helpful to your customers.

Offering online payment options that your customers can complete with a few clicks greatly simplifies your payment process and reduces unpaid invoices. This simple but effective strategy is something to keep in mind when considering how to write an email with invoice attached.

Invoice email key takeaways

Learning how to write an email with invoice attached doesn’t need to be complicated. Our findings show that these invoice details help ensure you get paid on time and win your customers’ future business:

• Keep your introduction and email body content simple and short.
• Summarize the services or products provided.
• Explain any discrepancies or adjustments made and highlight any important details or changes.
• Notify the recipient of any upcoming promotions or discounts.
• Remind the recipient of any past due amounts or other follow-up information.
• Don’t forget about proofreading.
• Attach invoice file documents as PDFs.

If you’re working with not just one person, but several people involved in a project (ie., a married couple), don’t forget to leverage email forwarding and CC to all relevant parties.

Some customers may request a confirmation of receipt after they send their payment. If you’re a QuickBooks user, you can automate this process by integrating with Method to save yourself time.

Method also keeps an updated list of your customers’ purchases that syncs with QuickBooks. It lets your customers pay their invoices anywhere, any time, using online payment gateways. Not to mention, it adds e-signature capture for estimates to get you paid faster.

Frequently asked questions

How do I create an invoice email template?

Creating an invoice email template involves writing a standard message that can be easily modified for different customers. Based on our firsthand experience, we recommend making a PDF template with your company branding and logo that you can attach to an email.

Save your email template as a draft that you can duplicate for each customer. You can also include your company logo and contact information as part of your email signature to avoid writing it out every time. This strategy saves you a lot of time once you’ve learned how to write an email with invoice attached.

How do I send an invoice through email?

To send an invoice via email, attach the invoice document (PDF format is recommended) to an email message.

Ensure the email subject line is clear. For example, it might say, “Invoice #12345 from [Your Company]”. Include a brief message outlining the invoice details. You can follow one of our examples described above.

How to write a past due invoice email?

A past-due invoice email should be firm yet professional. It should:

• Remind your customer of the past due status.
• Reference the specific invoice.
• Request immediate payment.

It’s helpful to mention any potential consequences of continued non-payment, such as late fees or service cancellation, while still offering assistance if they are encountering issues.

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While interest rate charges for unpaid invoices will vary according to your state, implementing late payment interest encourages customers to pay their outstanding balance on time. If you’re dealing with past-due invoices for the first time, knowing how to implement penalty charges can protect your business and ensure a healthy cash flow. 

Read on to find out how late payment fees work and how to calculate this number for your business.

What is late payment interest?

Late transaction payment interest is an additional charge you add to an unpaid invoice. Our research indicates that you should always include the payment interest rate in your original contract and payment terms.

When can you charge late payment interest?

Vendors can charge a late payment fee if a customer fails to pay their invoice on time, though our findings show that most will charge this amount after thirty days. Based on our observations, it’s best practice to allow a grace period for late invoices.

What is the standard late payment interest on an invoice?

The late payment fees for overdue invoices can vary between 1% to 3%. Because the government doesn’t regulate a business’ late payment fee, you can, in theory, charge whatever payment interest rate you see fit. However, small companies tend to charge a late transaction payment interest rate of 1.5%, while larger enterprises charge 2.5% and up.

Can you legally charge interest on overdue invoices?

Yes! However, our investigation demonstrated that customers are not obligated to settle a late payment fee if it isn’t indicated in the contract terms.

When should you not charge a late payment penalty?

You shouldn’t have to make a late payment charge if your customer settles their outstanding balance within the number of business days indicated in your original contract. For instance, if you implement late charges within a net-30 period, it won’t make sense to charge interest if your customer pays within 29 days.

How is late payment interest calculated?

As mentioned, our research indicates that most businesses charge a flat penalty of 1% to 1.5% of the overdue amount. To calculate a reasonable interest rate, you first have to calculate an annual interest rate and divide that number by 12. The resulting number will be your monthly rate, which you multiply by the overdue balances to get your late fee charge. 

For instance, if you have an annual interest rate of 12% on a $15,000 project, you’d get a monthly finance charge of $150. The total outstanding balance will then become $15,150.

How to create a late payment policy

Through our practical knowledge, implementing a late payment policy encourages customers to meet payment deadlines. Here are some tips on how to create one. 

1. Send out an invoice with a late payment policy

Always inform customers of your late filing penalty in the original contract and indicate the number of days they must settle before incurring a charge. Include other information, such as: 

• Invoice amount.
• Due date.
• Services rendered. 
• Contact information for easy reference.

To keep track of late payments, it’s advisable to use a dedicated accounting platform like QuickBooks or Xero.

If you’re working with a customer who has failed to settle payment reminders in the past, you might consider expanding your payment options to make it easier for them to compensate you. For example, you might want to introduce checks, money orders, or online payment portals on top of credit card payments.

2. Send out payment reminders

One of the best ways to avoid late invoices is to send customers payment reminders. Write an email to remind them of their upcoming bill a day before it’s due to stay top-of-mind. If necessary, you can also follow up with a phone call in case your email gets lost under hundreds of others.

3. Charge a late fee for a delinquent payment

If payment reminders don’t work, send a follow-up email indicating the possible late fee charges your customer might incur due to non-payment. Based on our practical knowledge, we’ve found that in some cases, you might want to consider your legal options with a collection agency, especially if your customer has a history of delinquent accounts.

How to deal with late payments and unpaid invoices

If you’ve exhausted your options for following up on a late payment, you can take other action, including: 

• Providing an alternate payment method and payment plan.
• Consulting with a lawyer or debt collection agency.
• Halting all ongoing projects until your customer meets the deadline for payment.

What information should be provided when charging late payment interest?

When charging late payment interest, you always want to keep your customers aware of your:

• Overdue balance policy.
• Penalty rate.
• Payment collection methods.
• Applicable period.

What should you do if a customer refuses to pay?

If you state your late fee policy in the original contract, customers are legally obligated to pay you. The only way to collect compensation costs after they refuse is to take legal action. However, bear in mind that this can ruin your business relationship. 

Based on our observations, there are several actions you can take if your customer refuses to settle a prompt payment, including: 

• Undergoing professional mediation to help come to an agreement with your debtor.
• Making a court claim, at least for partial payment.
• Making a statutory demand which can potentially bankrupt your customer.

Download your invoicing email templates for free

Unsure of how to word your payment follow-up email?

Use these free email templates to send invoice follow-ups and payment requests to your customers.

If you don’t see the download form, download template here.

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Late payment interest key takeaways

There are many reasons a customer may fail to settle their invoices – errors in processing payments, a lack of funds, or simple forgetfulness. By adding a late fee on top of their bill, you can get the compensation you deserve while encouraging them to pay on time.

Software like Method can make it easier to track outstanding invoices and automatically remind your customers when it’s time to pay.

Minimize your late payment interest with a free trial of Method CRM!

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