How to create a Final Payment Reminder Letter
Easy to Use Legal Templates
Quickly and easily create any legal agreement for you or your team.
Affordable Plans
Straightforward pricing plans and bespoke packages built to simplify all your legal demands.
Vast Document Library
Zegal’s comprehensive collection of agreements means you always have what you need at your fingertips.
A Final Debt Collection Letter, also known as a Letter before Action, is a short, clear demand to repay an outstanding payment from a client or customer after previously issuing reminder letters.
What are Debt Collection Letters?
Debt Collection Letters are the first step in the debt collection process. In order to recover debt, it is recommended to first issue late payment reminder letters to clients or customers about overdue payments. These are also known as Demand Letters or Letters of Demand.
Why send Debt Recovery Letters?
Debt recovery is a major concern for many small businesses. Late payment reminder letters can be a useful and affordable way of chasing up overdue invoices by prompting a customer to pay the overdue amount. Having a structured credit control process in the collection of debt saves time spent collecting payments and managing cash flow.
What is a First Payment Reminder Letter?
A First Debt Collection Letter is a short, friendly reminder to repay an outstanding payment from a client or customer. It should be as polite and friendly as possible and professional. It can be sent by any means but it is usually sent by e-mail or postal mail.
What is a Second Payment Reminder Letter?
A Second Payment Reminder Letter serves as a follow-up reminder after already issuing a First Payment Reminder Letter, and the tone can be more direct than the first. It helps to minimize the amount of valuable time and effort spent chasing late payments and serves as part of a structured credit control process. It can be sent by any means but it is usually sent by e-mail or postal mail.
What is a Final Debt Recovery Letter?
Also known as a Letter before Action, a Final Debt Recovery letter is the third and final reminder to pay an outstanding debt. Basically, it is a short, clear demand to repay an outstanding payment. Either, it may or may not, include the mention of pursuing legal action if the debt is not settled. Importantly, it is not a legally binding document and can be re-issued multiple times.
What is the Pre-Action Protocol for Debt Claims?
In the UK, the Ministry of Justice has released requirements with regards to the information and process required in order to claim payment of the debt from an individual or sole trader before court proceedings can be issued. The Pre-Action Protocol for Debt Claims serves as a good general business debt collection best practice guideline.
What are the requirements of the Pre-Action Protocol for Debt Claims?
In order to satisfy the requirements of the Pre-Action Protocol for Debt Claims, your communications should include:
- Details of the amount owed and the agreement under which this debt originates
- Up to date details of any interest and administrative charges added
- Payment instructions including the method of and address of payment
- Information about payment options available to the debtor
- A Reply Form, Information Sheet, Financial Statement Form, and a reply address for the Reply Form.
Letters should be clearly dated and sent by post unless alternative methods of communication have been explicitly requested.
Does a Letter before Action have to be sent by registered mail?
A Final Debt Recovery Letter, or Letter before Action, should be sent by postal mail unless alternative methods of communications have been explicitly requested. However, the gravity and intention of debt collection are communicated with a better chance of success if sent by registered mail.
When to send Payment Recovery Letters?
Payment Recovery Letters should be sent when a payment is overdue. A payment is overdue when an outstanding payment is outside the payment terms. If payment terms have not been specified, it is usually customary to consider a payment overdue after 30 days.
What are Payment Terms and Payment Instructions?
In essence, payment terms are the conditions under which a payment should be made. Usually, payment terms include when a payment is expected, any conditions on that payment, and any discounts or penalties relating to the timing of the payment. Subsequently, payment instructions are the means and methods of payment.
What are Common Payment Terms?
Essentially, parties are free to negotiate the desired payment terms. In practice, the provider of a good or service will normally have standard payment terms. Common payment terms include:
- Payment in Advance
- Or, Net 7 (payment due 7 days after invoice date)
- Net 30 (payment due 30 days after invoice date)
- Or, Net 60 (payment due 60 days after invoice date)
What is the difference between an Invoice and a Payment Request Letter?
An invoice, also known as a bill, is a commercial document issued by a seller to a buyer requesting payment for the provision of goods or services. It can be issued in advance or afterward. It usually includes a breakdown of the costs for the goods or services provided, the total amount due, payment instructions, and payment terms.
Is a final payment reminder sent via email legally binding?
It is better to have been in contact with the debtor before sending in a reminder for the final payment. The final payement reminder can be sent through an email with a followup final payment reminder via registered post. In case there is a legal proceeding there will be proof that effort was made to get in contact with the debtor.
Conclusion
Payment Request Letters are follow-up communications after an invoice has been sent but no payment received. They are commercial documents part of the debt collection process. Payment Request Letters are the first step if a customer is slow-paying invoices or refusing to pay an invoice.
You Might Also Like
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
The Zegal Template Library
Zegal's template library is a list of essential and premium business templates for your everyday legal needs.
Save money and time without sacrificing quality or missing vital legal requirements. Whether you're a startup or a larger enterprise, Zegal lets anyone create a legal agreement.
Let us take care of the legals so you can focus on running your business.
If you need more help, our "Talk to a Lawyer" feature gives you access to a qualified lawyer to get all the expert advice you need.
Try it for free today!
Related Documents
If you're creating a Final Payment Reminder Letter, you may also be interested in the following documents:
Nice things people say about Zegal.
"Using Zegal allows us to take a lean and efficient approach that cuts costs while maximising results."

Alex So
Managing Partner

"Zegal is easy to use and customer service is responsive and helpful! I strongly recommend it!!"

Alan NG
CEO

"Zegal makes onboarding a new client or employee fast and simple."

Veronika Kuznetsova
Managing Director

“Zegal really works well for all our legal documentation needs, and it is also user-friendly and mobile at the same time.”

Daniel W. Ho
Managing Director & Principal Consultant

“Zegal is like my teammate, helps me draft the right template, quickly gets my work done, and also saves me money on legal needs.”

Alan Schmoll
CEO & Co-Founder

“With colleagues, partners, and clients across the globe, Zegal provides an easy-to-use tool that streamlines processes that saves costs and time.”

Tony Wines
CEO of Turnkey

“Zegal has been such a great help in my business operations.”

Amanda A Atan
Managing Director at VIBES Mastery

“With Zegal, we work smarter rather than harder. Being a business professional, a proper document management system is always a must.”

Edgar Kautzner
Managing Consultant

“Zegal, a platform for compact package of legal templates, secured e-signing, reasonable cost and high level customer service.”

Paul Falzon
Director

“Zegal is easy to use, affordable and the platform is simple to navigate which makes the process of putting together a document fast and fuss-free.”

Jonathan Wong
Founder & Managing Director

“Love the new flow/design, very quick and easy to use now. I have done 2 or 3 customer contracts in a flash over the past 2 days.”

Chris Head
General Manager and Managing Editor

“Consistently positive experiences with Zegal’s technology, and customer services teams, who ensure that our issues or questions are responded to immediately.”

Tony Wines
CEO of Turnkey
