Overview of a Letter of Demand Reminder

Firstly, a Letter of Demand Reminder is an important document in the arsenal of a well-run small business. Notably, as a small business, managing cash is an important part of day-to-day operations. Therefore, instilling a smooth workflow to communicate reminders of overdue payments ensures a collections process that is effective and efficient.

Generally, a formal and process-driven set of communications using well-written templates goes a long way to ensure that you can collect payments in a courteous and timely manner. Also, this letter can also be called a Collections Letter, Past Due Invoice Letter or Notice of Overdue Payment

What is in a Letter of Demand Reminder?

Essentially, this one does what it says on the tin. Typically, a Letter of Demand Reminder is a short, crisp and factual letter you send out on a regular basis, using a standard process. Importantly, this can take much of the emotions out of the collections process.  Ensure you have the following in your Letter of Demand Reminder:

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?

A formal notice can be sent any time after the invoice is past due and payment has not been made.  Make sure that there is a process of escalation if the payments have not been made after 2 or more attempts at contact. 

Conclusion

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.  Ensure that you have a series of escalating letters if payments have still not been made.

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