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How to Write a Late Payment Email

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.

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 (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. 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:

Subject line: [Company Name] – Overdue Payment – [Invoice Number]

Dear [Name],

This is a friendly reminder that we haven’t received payment for invoice [Invoice Number]. The payment was due on [Due Date]. We’re not aware of any outstanding issues or reasons for non-payment, so we would like to respectfully ask you to make payment as soon as possible.

Please let us know when we can expect to receive payment for this invoice. If you have any queries, don’t hesitate to let us know. You can find the original invoice attached.

Kind regards,

[Name]

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:

Subject line: [Company Name] – Overdue Payment – [Invoice Number] – Second Request

Dear [Name],

Further to my previous correspondence, I am contacting you regarding late payment for invoice [Invoice Number]. The invoice was due on [Due Date], and payment is now overdue by [Number of Days Overdue].

Be advised that late payment interest may be applied if we do not receive payment within 30 days. Let us know when we can expect to receive payment for the outstanding invoice. Please find the outstanding invoice attached.

Kind regards,

[Name]

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:

Subject line: URGENT: [Company Name] – Overdue Payment – [Invoice Number] – Final Notice

Dear [Name],

We require your immediate attention to resolve this issue.

Invoice [Invoice Number] is now overdue by [Number of Days Overdue]. If we do not receive payment within 10 working days, we will refer the matter to a collection agency. As a last resort, we will seek to resolve the matter in court.

Our invoice terms are [X] days from the date of issue, and late fees of [X] percent may be applied. Given that the invoice is now 30 days overdue, an [X] percent fee has been added. You can find the updated invoice attached.

Please confirm your receipt of this invoice and advise as to when the invoice will be paid in full.

Kind regards,

[Name]

Next steps

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.

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GoCardless Ltd., Sutton Yard, 65 Goswell Road, London, EC1V 7EN, United Kingdom

GoCardless (company registration number 07495895) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration number 597190, for the provision of payment services. GoCardless SAS (23-25 Avenue Mac-Mahon, Paris, 75017, France), an affiliate of GoCardless Ltd (company registration number 834 422 180, R.C.S. PARIS), is authorised by the ACPR (French Prudential Supervision and Resolution Authority), Bank Code (CIB) 17118, for the provision of payment services.