Last editedFeb 20223 min read
Are you dealing with late invoice payments? You’re not the only one. In the UK, late payments are an enormous issue for SMEs. GoCardless found that, on average, UK SMEs are paid around 18 days late, and 1 in 6 invoices remain unpaid after 90 days (three months after work has been completed). Put simply, late payments represent a severe existential threat for many small businesses.
How can your business use email to tackle late payments?
Clearly, this isn’t acceptable. But what actions are available to business owners? An effective late payment invoice email could be the difference between getting paid and getting shafted. We’ve put together three late payment email templates you can use if you’re chasing payment: a polite reminder template, a firm reminder template, and a final notice template. Check them out right here.
Polite reminder email template (less than 14 days overdue)
In the best-case scenario, your customer won’t need more than a polite nudge to make payment. This isn’t altogether uncommon as invoices can sometimes fall through the cracks in a busy accounting department, so simply sending a follow-up email can sometimes do the trick.
With this late invoice payment email, be sure to keep the tone of the letter light and respectful, allowing the client to save face and make amends. Use this late payment reminder template for invoices that are less than 14 days overdue:
Firm reminder (over 14 days overdue)
If the invoice is over 14 days overdue, you’ll need to adopt a firmer and more direct tone. Be sure to reiterate the details of the invoice, including the invoice number and the amount due, and provide a clear overview of the repayment time frame. You should also enclose a copy of the original invoice, as it’s always possible that it was accidentally deleted or got lost in the shuffle. This late payment email template is best used once the invoice is around two weeks overdue:
Final notice (30 days overdue)
At this point, you should make it clear to the customer that your late payment email is a final warning. This means that you should include a final cut-off date, as well as an outline of the potential consequences of non-payment (including debt recovery arrangements). It’s also worth remembering that you are legally entitled to add late payment interest to invoices if they’re over 30 days late. Reminding the client of this fact may be enough to finally motivate them to make payment. Use the following late payment email template if the invoice is still unpaid after 30 days:
What to do if late payment emails don't get through
If your emails for late payment are falling on deaf ears, you may need to follow through on your threats of legal action. The debt collection process can be lengthy, so it’s a good idea to get the ball rolling as soon as possible. However, it’s also worth remembering that getting a solicitor or debt collection agency involved with your late invoice payment is likely to bring about a permanent end to your relationship with the customer. Ultimately, the matter may need to be resolved in court. If the cost of litigation is worth the value of the outstanding invoice, this is a step that you may wish to consider.
We can help
If you're having difficulty receiving payments on time, it could be worth revisiting your payment method. Rather than relying on the customer to transfer you funds, GoCardless can help you automate payment collection - cutting down on the admin your team needs to deal with when chasing invoices and drastically reducing late payments.
In the rare event that a payment does fail, our intelligent retries product, Success+, can step in to collect the money you're due.