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5 tips for managing your debtors

Some useful information in the management of these accounts receivable in order to guard against the risk of payment default.

One of the latest Graydon studies on B2B payment behavior reveals that

  • ๐Ÿšจ 31% of invoices are not paid on time.
  • โ˜ ๏ธ Almost 10% of the invoices were paid more than 90 days late or not paid at all.

Negligent follow-up of outstanding invoices and poorly designed reminder letters are loopholes that customers can rush to pay late and make all kinds of excuses.

What is a payment reminder?

A payment reminder (or invoice reminder) is a communication that pushes your customer to pay his bills while preserving the customer relationship.

The functions of a payment reminders

The late payment notice has three main functions:

  1. To inform the customer. It presents the facts (the unpaid amount, the date of the invoice), and the possible consequences if the customer does not pay.
  2. To manage the relationship with the customer. If the customer pays late -or not at all-, the relationship with the customer will degenerate. In principle, however, the aim is always to maintain a good relationship with your client.
  3. Pushing the customer to react. You want the customer to pay the bill, preferably as soon as possible. You also want to convince the customer to pay his bills punctually in the future as well.

How to write a payment reminder

Formulate a clear "Call-To-Action"

  • Do this. Now. * This way.

Structure your communication

The beginning explains the reasons for the reminder: the client has not paid within the agreed time.

The middle contains all the specifications of the current invoices: a list of all invoices, with their number, amounts and due dates.

In the end, you 'call' the debtor to 'act.' You also explain to him what will happen if he does not make the payment.

Mention the sanction

Let the debtor know what penalties you will take if he does not pay, but only if you are determined to apply them effectively. Unsuccessful threats are pointless. On the contrary, you would lose credibility.

Talk about interest, reminder fees, the court, and do what you say, even if from a commercial point of view, it is not always easy. If you don't give in too quickly, your client will understand that you are resolved. Next time, he'll think twice when he gets a new bill from you.

Anything goes

It does not matter which channel you use to send your reminder. A letter, an e-mail, it doesn't matter. Even SMS and WhatsApp messages can be used to send payment reminders. What matters is that you are sure to reach your recipient.

If you have to go to court, your lawyer will ask you to present evidence that you have put your debtor in default. That is why it is advisable to send a registered letter at the end of the reminder procedure.


Never mention that it is the first reminder.

When (s)he sees the words 'first reminder' at the top of the letter, your debtor will immediately know that a second reminder will follow and will not see the need to react quickly.

He will quietly wait for the second reminder to arrive, and then the third, etc.

Your bills will remain unpaid in the meantime.

Don't be slavish in your tone of voice.

By trying to spare the customer, you could quickly give a negative image of your situation. An elegant way to remind the payment is due could be:

๐Ÿ‘ "Could it be possible that you forgot to pay our bill? If so, would you be so kind as to make the payment so that we can pay our suppliers, too?"

Use short sentences.

Use short sentences, few commas, simple, explicit language, no abbreviations.

Be concrete and specific.

Don't write too much, not too little. Only the right mix of information can push the debtor into action.

Stay positive.

Your opening sentence should be positive. A positive opening will increase the chances of getting a positive reaction.

๐Ÿ‘ "We now remind you of the outstanding invoices. As agreed, we confirm the agreements made in this regard. ยป

Remain a human being.

A payment reminder always comes from a person, not a department. So sign your reminder personally. It's more polite, and if the debtor has any comments or questions, he or she will know whom to contact as well.

Use at least one scanned signature and avoid having your reminders generated by an automatic system: your debtor would notice this immediately.

Address yourself to someone.

Your reminder cannot be seen as a standard letter. Always try to address a person. Speak to the customer personally using the 'you.' The 'you' can still be used in a first reminder if you are on a first-name basis.

Still, your client.

But, if the case doesn't go ahead and you don't get your payment, you can no longer use the familiar form of address for the debtor.

The client matters.

Make sure that the words 'you' and 'yours' are more frequent in your letter than 'me' and 'we.' You are not writing about yourself: you are writing about the behavior of your customer, who is in arrears. To find out where you stand, simply count in your current reminder letters how many times the terms 'I' and 'we' are used. Then, calculate the occurrences of the words 'you' and 'your' and compare.

๐Ÿ‘ "It is important that you respect the deadline for paying bills. ยป

๐Ÿ‘ "Then go to the website, where you will find the required information directly. ยป

Make your debtor's life easier.

Refer to the delivery and the invoice, and be as complete as possible.

An unclear reminder, where the debtor has to find out what it is or what exactly he has to pay, wastes his time.

  • Specify the balance and the delivery on the reminder, so he knows what it refers. Adding those details will increase the chance that you will receive your payment faster.

  • Specify a concrete payment term: Reminders often indicate a payment term that is subject to interpretation, with words such as quickly, urgently, within eight days, etc.

๐Ÿ‘Ž "We expect payment within 14 days.ยป Are these working days? Weekdays? From the date of receipt? This is causing confusion and discussion. Give a specific date instead.

  • Formulate it as a benefit to the customer. You'll increase your chances of collecting your bill if the debtor is convinced that he benefits from payment.

  • List all outstanding invoices. Give a detailed summary of all invoices. Include both current and past due invoices (with the invoice number, amount, and due date). The customer may pay all these invoices at once.

Presentation impacts.

You can present this information clearly in a column. Do not mention the number of days overdue. The customer could deduce from this how long invoices can remain unpaid without incurring interest.

Invoice IDIssue DateDue DateAmount

Before jumping into writing, make sure you will avoid six conventional formulations that diminish the effectiveness of your reminder.