Collection letter sample templates for email and SMS

Chasing late payments while unpaid invoices pile up is exhausting. You’ve put in the hard work and earned the right to be paid, yet your customers seem to be dragging their feet. Don’t worry, you’re not alone.

Many businesses face challenges in collecting overdue invoices due to uncertainty, concerns about being seen negatively, and lack of time.

However, timely payments are essential, and you need effective tools to ensure they happen. One powerful tool is the use of invoice reminders supported by a reliable accounts receivable system that consistently delivers them to customers on schedule.

The tips and sample collection letter templates below will help you overcome these challenges.

Tips for writing invoice and payment reminders

The do’s and don’ts of writing invoice reminders

Do:

• Have up-to-date contact information to reach your debtors via email, SMS, landline and post.
• Be polite and professional. Practise persistence while remaining professional and polite in your writing.
• Be honest. While it may be tempting to use persuasive tactics or embellish the situation, it is always better to provide accurate and transparent information.
• Be assertive – use ‘I’ or ‘We’ statements.
• Be ready with a series of templates and a communications schedule.
• Collate all outstanding invoices into one easy-to-read statement and attach it to your reminders. This approach keeps your communication clear.
• Send reminders directly to the person responsible for payments (protect the privacy of debtors).
• Provide multiple convenient options for making payment. By offering several ways to pay, you increase the likelihood of prompt and successful resolution of the outstanding debt.
• Shorten your SMS reminders to suit that channel
• Write in a tone consistent with your brand’s voice. Generally, the tone should be professional, helpful and open.
• Ensure email is sent from an email address the customer will recognise (e.g. <your name>@<your company name>.com.au. )

Don’ts

• Use an aggressive tone, inflammatory language or patronising remarks.
• Disclose the outstanding payment to anyone other than the debtor.
• Imply that you have or will proceed to legal action if this is false.
• Pretend the reminder is coming from a third-party agency (e.g. a debt collector) if it’s not.
• Introduce penalties not previously agreed to in your terms and conditions.
• Bombard your customers with unnecessary reminders.

How to sequence your reminders and letters

Based on our research, the most commonly used sequence for overdue invoice reminders is as follows:

1st follow-up: email
2nd follow-up: email
3rd follow-up: SMS
4th follow-up: phone call
5th follow-up: email
6th follow-up: Postal letter

To ensure effective communication with your overdue debtors, it’s recommended to use a combination of email reminders, SMS alerts, and phone calls. By intermixing these methods, you can reach your debtors through multiple channels and increase the chances of getting a response.

Drawing from the experiences of users of AR automation, it has been observed that, in many cases, full payments are received prior to the need for a fourth follow-up. This information serves as a valuable benchmark, suggesting that timely and effective reminders have proven successful in securing prompt payments.

While reminders are typically sent in a sequence, we advise against explicitly stating “This is your second/third reminder…” for each invoice.

Instead, consider consolidating all overdue invoices and their corresponding amounts into a single reminder. By communicating the total overdue amount, you align with common business practices where a company continues providing goods or services to customers despite the accumulation of overdue invoices.

Sample templates

In this scenario, you will be sending a total of five reminders to the same customer within 30 days, including one phone call. It’s important to note that you have the flexibility to choose intervals that align with your business needs. For instance, if waiting for 30 days to receive payment is too long to carry debt, consider shorter intervals to expedite the payment process

First collection letter

When to send: 7 days after the account is past due

Email reminder

Subject: Action required: Your account from <your company name> is overdue

Dear <customer name>,
I hope you are well. I know you are busy, so I’m sending a friendly reminder that your invoice <invoice number> from <your company name> is now 7 days overdue.

The amount owing is <total amount overdue>. I have attached a copy of the invoice for you.

You are welcome to pay by EFT or credit card <or other payment
service you offer>

Pay by EFT:
Account name: <insert>
BSB: <insert>
Account number: <insert>

If you wish to pay via credit card, please click on the secure link below:
<pay now button or link>

For any queries on your account, please email <name> at <email address> or by phone at <phone number>. Otherwise, we appreciate your payment as soon as possible.

Thank you,
<email signature>

Pro tip: ezyCollect allows you to add Pay Now buttons and links in your invoice reminders that take your customers to their own online payment portal.

SMS reminder

<your company name> is overdue by <total amount overdue>. We appreciate your prompt payment. Please contact <name> on <email address> or <phone number> if you have any queries. Many thanks.

Second collection letter

When to send: 8 days after the previous follow-up

Email reminder

Subject: <customer company name> – Your account is past due – action required

Dear <customer name>,

I’m following up to let you know that your account with <your company
name> is now more than 2 weeks overdue. The total amount owing is
<total amount overdue> made up of the following invoices <overdue
invoice table>*.

I have attached copies of the invoices for your convenience.

*(Here is an example of overdue invoice table):

I understand that oversights happen. However, I’d now appreciate your prompt payment of the outstanding amount. If not possible today, would you please let me know when we should expect payment?

As you know, we accept payment by EFT or credit card <or any other payment service you offer>

EFT:
Account name:
BSB:
Account number:

If you wish to pay via credit card, please click on the secure link below:

<pay now button/link>

Please be in touch with <name> on <email address> or <phone number> if you have any dispute with the invoices or concerns about payment.

Thank you in advance,

<email signature>

 SMS reminder

<customer company name> – This is a reminder that your account with <your company name> is overdue by <total amount overdue>. We would appreciate your payment today.

For EFT:
Account name: <insert>
BSB: <insert>
Account number: <insert>

To pay by credit card, please contact <name> on <email address> or <phone number>. <Name> can send you copies of the overdue invoices or answer your queries. Thank you in advance.

Third collection letter

When to send: 9 days after previous follow-up

Email reminder

Subject: <customer company name> – Your account is past due – we require your prompt action

Dear <customer name>,
This correspondence is to advise you that your account with <your company name> is now more than 3 weeks overdue.

Your total overdue debt is <total amount overdue> made up of the following invoices: <overdue invoice table>.

I have attached copies of the invoices for your convenience.

We have always appreciated your prompt payment in the past, and it is concerning for us to have an overdue account. Would you like to discuss payment options? Please be in touch today with <name> on <email address> or <phone>, or <name> will call you tomorrow to discuss.

Please understand that according to our agreed terms and conditions, your credit status will be on hold when your account is <number of days> overdue.

Payment can be made today via:

EFT:
Account name: <insert>
BSB: <insert>
Account number: <insert>

Or to pay by credit card, please click on the secure link below:

<pay now link/ button>

If you have already paid or can pay today, please let <name> know so you don’t receive a phone call tomorrow.

Thank you,
<email signature>

SMS reminder

Our records show your account with <your company name> is now well overdue. The total amount owing is <total overdue>, payable today.

For EFT:
Account name: <insert>
BSB: <insert>
Account number: <insert>

To pay by credit card, please contact <name> on <email address> or <phone number>. <Name> will call you tomorrow if <she/he> hasn’t heard from you today.

Thank you in advance.

Fourth collection letter

When to send: 6 days after the previous follow-up.

Email template

Subject: Your credit status with <your company name> is on hold.

Dear <customer name>,

Following the phone call from <name> in which payment options were discussed with you, please be advised that we have not yet received payment. If you have made a payment that we have not acknowledged, please call <name> today on <phone number> to let <him/her> know.

As discussed on the call, and in accordance with our agreed credit terms and conditions, your credit status is on hold until the overdue amount of <total amount overdue> has been received by <your company name>.

Also, as discussed, our next step is to initiate a third party to pursue the outstanding debt on our behalf.

The table below details all outstanding invoices, and I have attached copies again for your convenience.

<overdue invoice table>.

For EFT:
Account name: <insert>
BSB: <insert>
Account number: <insert>

Or to pay via credit card, please click on the secure link below:
PAY NOW

<Your company name> requires you to resolve the outstanding debt if we are to continue to be your provider. For any queries, please contact <senior manager> on <email address> or <phone number>.

Kind regards,
<email signature>

SMS template

Dear <customer name>,

Following the phone call from <name> in which payment options were discussed with you, please be advised that we have not yet received payment. If you have made a payment that we have not acknowledged, please call <name> today on <phone number> to let <him/her> know.

As discussed on the call, and in accordance with our agreed credit terms and conditions, your credit status is on hold until the overdue amount of <total amount overdue> has been received by <your company name>.

Also, as discussed, our next step is to initiate a third party to pursue the outstanding debt on our behalf.
The table below details all outstanding invoices, and I have attached copies again for your convenience.
<overdue invoice table>.

For EFT:

Account name: <insert>
BSB: <insert>
Account number: <insert>

Or to pay via credit card, please click on the secure link below:

PAY NOW

<Your company name> requires you to resolve the outstanding debt if we are to continue to be your provider. For any queries, please contact <senior manager> on <email address> or <phone number>.

Kind regards,
<email signature>

Next course of action

Based on our sequencing template, if you haven’t received any payment by the third collection letter, we recommend you call your overdue customers. Using collection call scripts can help you formulate polite and persistent calls. Sending a collection via post also helps formalise the gravity of the situation.

In cases when payment hasn’t been made after several collection attempts, you can proceed to escalate outstanding invoices to a debt collection agency that can send a letter of demand on your behalf.

Automate your collections process

With polite, personalised reminders that consistently reach every overdue debtor, you can minimise the risk of bad debts and even help avoid legal action. By automating your accounts receivable collections, you can save countless hours each week and ensure you have enough time and cash to grow your business.

Discover what automation can do in your accounts receivable collection workflow. Speak with one of our collection experts to go through options for your business.