Formal reminder letter is send to the business partner who is late with payment of invoice (s).

Asking for a late payment is tough, and unpleasant thing, but shortages of cash, may significantly disturb operations of the company.

Usual business practice is to send reminder for delayed payments in the following timeframe:

1. a week before the Due Date
2. on the day the Payment is Due
3. a week after late Payment was Due
4. 2 weeks after late Payment was Due
5. one Month After Late Payment was Due

These five reminders for payment can be sent by email, or using semi-formal letter.

If you still haven’t received payment after these 5 reminders, it is time to send a formal reminder for payment of outstanding amount. If the partner neglects this letter than your company can take legal steps needed to settle the payment of the outstanding amount.

Formal reminder for payment of outstanding amount

RE: Debtor Statement – Payment of outstanding amount

Dear Mr. Low,

Please see the attached Debtor Statement up to 25/9/18.

The verbal agreement between you and Mr. Smith on 2 June, 2018,  specified cash on delivery (COD) on 50% of total orders for customer Toys R Inc.

We are yet to receive any payment from you. Please note that if payment is not received by the end of October 2018, we will impose late payment charges at the rate of 1% per month for the above-agreed amount (USD 237,000.00).

Please do not hesitate to contact us if you need further clarification.

Your prompt action and attention are highly appreciated.

Thank you,

Mr. John Willey

Finance Officer