Collecting Money From Customers

Reminder Letters And Emails

There is no specific form or wording that should be used when chasing up payment of an invoice informally. Nor are there any rules on how long you should wait until you chase an email but it would be unusual to start chasing any earlier than the expiry of your contractual payment terms.

You might want to use a single form of reminder or perhaps have a sequence of standard reminders and requests for payment. You could have a polite reminder to coincide with the expiry of your payment terms and perhaps a more firm approach 14 days thereafter.

It is down to your judgement as to how firm you are and the tone you adopt in your communications chasing up payment of unpaid invoices. If you are aggressive or confrontational, it could damage the relationship you have with that particular customer in the long term. There is a difficult balance.

Also, in our experience, it is also very effective to pick up the phone and call someone to chase up payment.


Suggested Email Content As A Polite Reminder

“Dear [      ]  

I hope you are well.

Please find attached a copy of our invoice dated [       ]. I should be grateful if you would attend to payment as soon as possible.

Kind regards

[       ]”

Suggested Follow Up Email Content As A More Firm Approach

“Dear [      ]  

I hope you are well.

I  write further to my email dated [       ] of which I attach a copy.

Our payment terms are [      ] days and I should be grateful if you would attend to payment by return.

Yours sincerely

[       ]”

Formal Letters Before Issuing Proceedings

The courts expect court proceedings to be a last resort and that a reasonable process has been followed before commencing a claim. If the court considers that you have not taken reasonable steps before commencing a claim, it court result in criticism and potential adverse consequences down the line.

If you are pursuing a company, there is no specific guidance to follow but we would recommend sending a final email or letter, setting a deadline for payment and making it clear that if payment is not made by then, that court proceedings will be issued.

The position when dealing with individuals and partnerships is different. For those, there is some specific guidance to follow in terms of pursuing unpaid invoices under the Pre-Action Protocol for Debt Claims. You can read it here. It might seem overwhelming but it is straight forward, provided you follow the guidance on what the letter of claim ought to include and the time that must be given before issuing a claim.


Prevention Is Better Than The Cure

Collecting money from customers is a crucial task for any business, as cash is king.

Some customers are angels, paying on time without trouble. Others however, will need monitoring carefully and pursuing vigorously.

Some customers will deliberately pay late to benefit their own cash flow. Others might just be disorganised and need a reminder or statement of account to be sent to them.

Whatever the reason, if after reasonable requests and reminders have been sent, the money still hasn’t arrived, you need to take action. You ought to have a system in place and we encourage you to download our free top tips on cash flow by completing the subscribe form.

Prevention is better than the cure, so you should also consider the steps you can take to minimise the risk of invoices falling overdue.

To learn how to take practical and effective action to recover overdue invoices through the courts, watch our online courses.

Firstly, we give an overview of steps to take to remind and pursue customers for payment before commencing a claim in court.