How to best word a letter chasing payment of invoices

A question about : How to best word a letter chasing payment of invoices

Hi

Been working for my Dad since April, on a local magazine which operates as part of a franchise. The magazine is free and we cover printing costs via selling advertising.

I mainly do the admin, including the invoices. So far most people have paid (eventually), some after a prompt by a second invoice, or sending an email if we have it on file.

However we still have some outstanding from April and May and I need to write some kind of letter to chase payment. I am unsure how to word this without coming across too harsh, as because it is a new business we don't want to deter them from advertising again (although some would argue, if they aren't going to pay on time, don't let them readvertise)

I am also aware we can add late payment charges etc but not sure whether to mention that or not.

Would something like this be OK?

I must add, this is the first time I have had this type of role.

James,

Despite reminders your previous 2 invoices remain unpaid for your May and June adverts in xxx.

I enclose another copy of your invoice with our payment details. If payment is not received within 30 days, we reserve the right to add late payment charges to your account.

We would appreciate your cooperation in this matter.

???

Thanks for any help

Sarah

Best answers:

• Hi Sarah,
  I work in accounts payable and receive these letters on a daily basis. The best way in my opinion is to telephone every other day or so and speak to the same person each time. If to no avail then contact their manager (i.e. the accounts manager). It's more effective than a letter because something has to be said back and they'll want to get you off their back. It also means you have personal contact which can help develop the business relationship.
  For long overdue debts like this however you need to send formal letters out as well. I would say your letter is fine, I would say address the individual as Mr/Mrs etc.., also mention something about their account is temporarily suspended (as well as late payment charges). Add a contact telephone number in case they want to query something with you. And also add at the bottom "if payment has been made please accept our apologies and disregard this reminder."
  For a stronger letter you can put "payment must be made within 7 days of the date of this letter or the matter will be passed to our solicitors". Keep a record/log of all correspondence in case it does end up in court.
  Hope that helps,
  Tim
• 2 points that might help:
  Some companies pay on statement - not on invoice. If you invoice monthly, send a copy of the statement at the same time showing all outstanding invoices. Show all info - incl. value due now and date last payment received (i.e. make it easy for them to pay you).
  Send copy invoices and statements via fax or email (only if you know they can accept attachments) - saves postage and gets there quicker.
• Thanks for the responses
  The example I gave used a first name, simply because the guy concerned is my neighbour (who I approached to advertise after he did a job for me,and now he won't pay!)
  Otherwise yes I would use the more formal mr/mrs approach.
• I give 30 days for compaines to pay. If they dont pay within 30 days, I send them another invoice with overdue and say I charge 12% APR interest on any outstanding amounts. It soon gets them to pay. Also call them up every 2 days you havent got payment. If they are bad payers, get them to pay by card upfront, if they dont like it, then its a customer you dont need.
• I find most will ignore letters , and quite often phone calls .
  Turning up on doorsteps can work wonders , my husband has been known to do that and sit there until someone signs a cheque lol.
  If you do send letters threatening further action you must stick to and you can file a county court summons online ( even then a % still wont pay ! )
  As to adding charges i think you have to include this in the terms and conditions you should get them to sign prior to doing the job .
• Thanks again.
  My bosses (inc my dad) do the actual finalising of orders for adverts, only one I approached and then they took over, in agreeing the deal etc, so they will have dealt with the terms and conditions side. In future though I will make sure they are added to the original order forms (telling my dad what to do!, haha)
  The first set of invoices went out without any due date on them, but then when people werent paying we added the "payment is due within 30 days of invoice date) onto the payment details box on the invoice, payment has been quicker since but still people are delaying.
  I am going to have to start phoning and chasing I guess. I am not brilliant on the phone but going to have to make myself as if nobody pays then the magazine makes a loss and they may have to get rid of me....
  One other thing... One customer messed us about loads, wanted adverts but would never tell us what he wanted exactly and we were chasing him right up to deadline every issue. Words have since been exchanged between the editor and customer and they won't be readvertising, but still owe us 3 months of adverts. It is a branch of Yates wine lodge so I have written a letter to head office (as personal visits, phonecalls, letters all end with us being fobbed off or ignored) but I can't find out the name of the MD or similar to send it to, I want to make sure it gets to the right person to increase the chances someone takes notice of it!
  This is all very different for me, I have always worked in Retail and had a brief spell as a police community support officer so it's just getting used to the way things work I guess
• I would def call weekly at least, and get a promise of payment / reason for non payment - not receiving the invoice is most likely (poor!) excuse.
  fax/email a copy straight away, and request acknowledgement, and/or when payment is to be made. follow this up if no reply with 24hrs.
  giving them a soft contact (any queries etc? please call us..) shows you have tried to resolve any issues, should it go to court.
  reminders should be simple to start with- a/c overdue, please pay.. then nxt one with ACCOUNT OVERDUE IN LARGE BOLD LETTERS!
  I would also escalate each time you contact them, especially if they are unlikely to advertise again.. always get full name of person you speak to!
  make it clear as to the invoice details, days overdue(?), amount o/s, and possible extra costs if not paid in accordance with terms etc..
  if for a larger co, some have a website contact page- use the complaint option if possible, but be polite and professional!
  KEEP COPIES OF EVERYTHING!
  for future ads, can you insist on pre-payment?
  (yes, i am a frustrated out of work credit controller!)
• Does it make any difference if the 'company' that has not paid the invoice is a registered charity? There was still a signed contract for the work undertaken but not paid for.
• I think few businesses pay invoices these days until chased, everyone has a queue of people to pay, times are tough, cashflow is complicated, no one is going to rush to pay any bill. You can't take it personally and you can't be scared of credit control work. We find phone calls to be most effective, if you make them regularly, and we back ours up with weekly emails, so no-one can say they didn't know they still had to pay us.
  It's the ones who keep coming up with excuses after several reminders you have to worry about, and start to get tough with.
• Firstly, it sounds like you have alot of repeat, month-on-month business. Why don't you look at getting these customers onto standing orders / direct debits?
  I think my business is in all likelyhood in the minority in that I pay all of my suppliers in 30 days or less. Mostly because the majority of my suppliers are small local businesses whom I would hate to see fail.
  My customers, on the other hand, are a very mixed bag of those who pay early, those who pay on time, those who pay late regardless and those who don't pay until you chase them. You will very quickly learn who these are and so can concentrate on chasing them early. If they owe you a substantial amount, try calling them a week or so before its due, saying "just calling to check you have received our October invoice" at least then you take away the we haven't received it excuse when you chase a week or two later.
  Seriously - don't send letters until you think you might be heading for court. Just keep a careful diary of when you rang, time/date/person you spoke to with what they promised. Phone calls take two minutes and you get instant feedback. With your regular customers you'll quickly build a relationship which, as said previously, can result in a very pleasant, friendly chat once a month. Also, if you're friendly with the purchase ledger clerk, you're more likely to make it onto the cheque run in the first place!
• I agree with all the people here about sending letters. Do not do it unless you are thinking of taking court action. keep sending reminders or statements. It depends on the business, but my accountant told me that many firms will pay only on their payment date after the 30 days are up which means that phone calls within the first two months are probably going to be ignored with many firms.
  I have found that if you think that you are getting fobbed off then increase the frequency of phonecalls say from once a month to once every two weeks and then every week. Always be polite and businesslike and do not make threats or any implied threats.
• Note that this thread was bumped by some spam which has now been dealt with. Remaining advice remains sound ...
• I think of it as a game. We run a small limited company, offering management consultancy services to major companies (yes, you'll have heard of them). We invoice monthly, 30 days terms. At the end of 30 days I send a standard e-mail saying 'Having checked our records, I note that your payment for invoice dated xyz has not yet been received..' 7 days later I ring them and have a nice little chat, during which I just happen to mention that we haven't been paid yet (by this point we've already sent the next invoice out). About a week later, we get the money. And we do it all over again next month. Fun, isn't it.