Overview of a Letter of Demand (Friendly reminder)
Typically, you’ll want to issue a friendly reminder to a Letter of Demand when you want to keep things cordial with your working partners. Essentially, as a small business, managing cash is an important part of day-to-day operations. Thus, instilling a smooth workflow to communicate reminders of overdue payments ensures a collections process that is effective and efficient.
Importantly, a formal and process-driven set of communications using well-written templates goes a long way to ensure you can collect payments in a courteous and timely manner. Additionally, this letter can also be called a Collections Letter. Or, a Past Due Invoice Letter or Notice of Overdue Payment
What is in a Letter of Demand Friendly Reminder?
Basically, this is a short, crisp and factual letter that is sent out on a regular basis and using a standard process. Essentially, this can take much of the emotions out of the collections process. Ensure you have the following:
Contact Details of the Customer – Include at least the address, telephone number and the email address.
Amount Overdue – The amount that needs to be paid by the customer.
Invoice Reference – It is always good to refer back to the invoice in question. And mention the date in which it was raised to increase the sense of urgency.
Your Contact Details – Always give the customer as much information as possible to contact you to help resolve the issue.
When Should You Use a Letter of Demand Reminder?
Typically, a formal notice can be sent any time after the invoice is past due and you have yet to receive payment. Importantly, make sure that there is a process of escalation if you do not receive payment after 2 or more attempts at contact.
In general, a proper and courteous letter when payments are past due will always help to keep a cordial relationship with the customer. Use this handy letter as the first step in collecting. And, ensure that you have a series of escalating letters if payments have still not been made.
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Along with this document, make sure you see these other templates in our library:
- Shareholder Agreement
- Option Agreement
- Employee Option Repurchase Agreement
- Share Appreciation Rights Plan
- Share Option Plan
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