Overview of a Letter of Demand (Second reminder)

Essentially, a Letter of Demand (Second reminder) is an important letter to have in any small business’s arsenal. Notably, as a small business, managing cash is an important part of day-to-day operations. Additionally, instilling a smooth workflow to communicate reminders of overdue payments ensures a collections process that is effective and efficient.

Firstly, 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.  Secondly, the Notice of Overdue Payment letter can also be called a Collections Letter, Letter of Demand, or a Past Due Invoice Letter.

What is in a Letter of Demand (Second reminder)?

In essence, a short, crisp and factual letter is key. Additionally, one that is sent out on a regular basis and using a standard process. Importantly, this can take much of the emotions out of the collections process.  Therefore, 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 (Second reminder)?

Generally, a formal notice can be sent any time after the invoice is past due. Additionally, make sure that there is a process of escalation if you don’t receive payments 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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