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How to Write a Late Payment Email

Rob Keating
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Last editedApr 20236 min read

Are you dealing with late invoice payments? You’re not the only one. In the UK, overdue 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.

A more recent study from Barclays indicates that this is very much still an issue. According to their research, 58% of SMEs are owed money on overdue invoices. Barclays’ study highlighted some of the many negative effects of overdue payments. Put simply, overdue payments represent a severe existential threat for many small businesses.

Our research into 'money mutedness' also indicates the very British trait of leaving things unsaid is one the factors contributing to businesses being under- or unpaid. 25% of British small businesses feel uncomfortable talking to their customers and suppliers about money.

How can businesses use simple emails to tackle late payments?

So what exactly can business owners do about overdue payments? Learning how to write an effective late payment invoice email is a good place to stat. 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.

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Polite reminder template (less than 14 days overdue)

In the best-case scenario, your customer only needs a polite nudge to make payment. This is actually fairly common, as invoices can sometimes fall through the cracks in a busy accounting department. This means that just sending a polite follow-up email can sometimes be enough.

When you send your first overdue invoice email, be sure to keep the tone of the letter polite and respectful. This avoids creating friction with the client and encourages them to resolve the situation. 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,


Firm reminder (over 14 days overdue)

If the invoice is over 14 days overdue, adopt a firmer and more direct tone. Reiterate the key details of the invoice, including the invoice number, the amount due, and the payment terms.

You should also enclose a copy of the original invoice, as it’s always possible that it was accidentally deleted or just got lost. 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,


Final notice (30 days overdue)

At this point, make it clear to the customer that your overdue invoice 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. Provide information about your debt-recovery arrangements.

It’s also worth remembering that you may be 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,


What to do if late payment emails don't get through

If your emails for overdue payment fail to get the response you want, decide whether or not the matter is worth pursuing. If you are going to go down the debt collection process, keep in mind that it can be lengthy. It’s therefore generally advisable to get the ball rolling as soon as possible. 

Keep in mind that ultimately your dispute may end up in court. You may have to wait a long time to get a hearing. When you do, ensure that the hearing goes in your favour. This generally means showing both that the money is owed and that the customer has had reasonable opportunity to pay. This is part of the reason why it’s important to give your customers regular reminders about their overdue payment before taking action.

Even if the hearing does go in your favour, you still have the challenge of enforcing the judgement. You also probably have to accept the fact that your relationship with the client is permanently ended. On the one hand, this may be a moot point if they are not paying you anyway. On the other hand, it may still be worth making one last effort to salvage the situation.

Charging late fees on overdue invoices

In some cases, charging late fees on invoices can be a very effective way to get businesses to prioritise them. In other cases, charging a late payment fee can end up being counterproductive overall.

For example, if a business is having cash-flow problems, it may simply not be in a position to pay at this point. Charging a late payment fee may encourage your customer to prioritise your payment over another. It may, however, cause you to lose a customer that still had value.

One potential way to resolve this dilemma is to apply late payment fees by default but to be prepared to waive them to assist your customer. However, make it clear that you are making an exception that you do not expect to see repeated. Ideally, also take steps to ensure that you apply particularly robust credit control to that customer.

What steps should I take before charging late payment interest?

Always check the current rules on charging a late payment fee before you even consider whether or not to apply one. At present these are different for businesses and consumers.

Offer alternative payment methods

If you do need to chase an unpaid invoice, it is useful to be able to offer some flexibility. For example, if you struggle to get clients to send bank transfers or cheques promptly, give them a list of alternative payment methods. Specifically draw their attention to these options and suggest that it might be better to switch to one of them. 

You may find it particularly helpful to guide them towards Direct Debit. This puts you in control of setting up payments. They can benefit your customer as much as you: they don’t have to remember to pay your invoices, and you don’t have to chase them to do it.

Similarly, if a client is already in arrears, you might allow them to pay by instalments provided that they agree to set up a Direct Debit. You can set up the instalments in advance. Your client is automatically notified of when they will be charged. They therefore know that they have to have the funds ready in their account. 

If the payment does fail, you’ll be notified. Then retry the payment when the client does have funds. If you wish, use GoCardless Success+ to manage this automatically.

How to prevent late payments

The best way to prevent late payments is to encourage your clients to pay by Direct Debit. This benefits them because it means they only have to provide you with an authorisation to take payment (a mandate). After that, you take care of all the administration for them. They are notified of any actions taken. With GoCardless this happens automatically. They are also fully protected by the Direct Debit guarantee.

Using Direct Debits benefits you because it significantly increases the likelihood that you are paid in full and on time. When payments do fail, you are notified promptly. Then decide how you wish to proceed. For example, you could use Success+ to retry payments automatically. Alternatively, you could use Instant Bank Pay to collect the funds with minimal delay.

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.

Find out how GoCardless can help you with ad hoc or recurring payments.

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Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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