For starters, it's important to remember that even though you are trying to collect money for your company, and in some (okay, most) instances there are frustrations involved, that your email is as professional as possible. Even if your client has missed a payment date that was promised on an invoice. There are a few key things to include in an accounts receivable collection email in order to make them effective. First, always be sure to include the original invoice and invoice amount in every correspondence, your goal is to remove as much friction as possible and if you are sending emails on your outstanding accounts receivable and not including the invoice in question, the likelihood of them recalling their inbox to find it is slim.
Second, be courteous and professional with your reminders. Things slip through the cracks often in this business. In specialty contracting, people wear a lot of hats and it's easy to get side tracked. Let them know that you still haven't received the payment but don't point fingers on the late payment. Include as much data on the invoice as possible, including the date and when it's due (or was due) and offer solutions if they can't pay the invoice like additional payment terms.
An effective debt email should be concise and to the point. It should also be polite and professional. You want to make it clear that you are owed money, but you don't want to scare off the customer or make them angry. At last resort you'll need to remind them of the consequences of non-payment. Remember, every interaction with your client is a reflection of the company and an opportunity to earn more business.
To ensure that you have consistency, and to try and remove as much emotion behind the collection process you should implement effective email templates into your standard business practices. To do this, you should sit down with your accounting team and determine what intervals and what stages of the payment cycle you want to send payment reminders to your customers. These templates will serve as the framework for your team or your accounts receivable automation software to begin collecting money consistently. An AR email template is a pre-written sample email that can be used to contact customers who have past-due invoices. This template can be used to ensure consistency in collection efforts and to prompt payment from customers.
Dear {{Customer Name}},
This is just a friendly reminder that this invoice is coming due in a few days, I just wanted to make sure we were in your accounting system and the invoice was approved for payment. According to our records {{Invoice Number}} is due {{Invoice Due Date}} . We have emailed a detailed copy of your account statements. In the event you have not received these messages and documents, we have provided a summary of your account below. Can you please let me know that you've received this and if there are any issues?
Invoice number:
Invoice Date:
Amount: Due Date:
Sincerely,
Dear {{Customer Name}},
This is just a friendly reminder that your account is past due. According to our records, {{invoice number}} was due on {{invoice due date}} . A copy of the invoices and is attached and details are below. If the payment is on the way, great! Please let me know so I can update my records.
Invoice number:
Invoice Date:
Invoice Due Date:
Days past due:
If there is an issue, please contact us as soon as possible so we can get it resolved or arrange for another payment plan. We appreciate your business!
Sincerely,
Dear {{Customer Name}},
Invoice {{Invoice Number}} is now x days overdue and we have yet to receive your payment. If you have not already done so can you please send a check for the outstanding balance? It's important to continue an open line of communication betweeen us in the event you are unable to process this. If we do not receive payment as soon as possible we will hav to add a late fee to your account. Feel free to contact us about your outstanding payment.
Invoice number:
Invoice Date:
Invoice Due Date:
Days past due:
Sincerely,
Dear {{Customer Name}},
Invoice {{Invoice Number}} is now 60 days past due and we have not received any communication from {{your company}} about resolution. A late fee has been added to your account, and if payment is not received by January 15th, we will have to escalate which may include taking legal action or processes a lien. Please have someone from your office call our CFO today.
Invoice number:
Invoice Date:
Invoice Due Date:
Days past due:
Sincerely,
The strategy behind your collections process can vary depending on the type of email you're sending. For example, a friendly payment reminder email will be different than a followup email after a missed payment. But in general, there are a few key things to keep in mind when crafting your collection emails.
First, not every customer is the same. You should have a series of email templates based on what kind of customer you're approaching. Examples could be, your top 5 customers receive one flow and the tone is much more polite. Top 5 customers can mean a lot of things, it could mean that they are your quickest paying or it could mean that they are your largest. You could also have a series of collection email templates directed at a new customer you're trying to foster a relationship with, or get more work with. And lastly, your bad customers. The ones that you know that they're invoices are always going to be overdue and there will be potential legal action involved.
There is no one-size fits all template strategy. Utilizing AR Automation software will make this process much easier as you won't have to remember which templates you are using for which customers.
If you're looking for more helpful tips, templates and guidance on Accounts Receivable and Collections, we've got just the thing. Book a call with our team to discuss your Accounts receivable strategy or let us handle it for you and alert you when invoices have questions or they're in jeopardy. Our team of experts have put together a wide range of resources that can help you streamline your receivables process and improve your collections strategy.
The real MVP in fostering relationships, is also the positive reinforcement email. A Thank you for paying your invoice template goes a long way with customers. Accounts Payable staff are always bombarded with the "when will I get paid" emails and phone calls, and likely are never receiving a thank you.
It is always a good idea to send a thank you email after receiving a payment, especially if it was late. This shows your appreciation for their business and lets them know that you value their partnership. Make these emails as personable as possible. AP staff can be your best friends, and they can also make your life much more difficult if they feel like you aren't appreciative of their efforts in getting you paid.
Here's a template:
Good morning {{Customer Name}}!
I just wanted to send you an email this morning and let you know that we received your payment on invoice {{Invoice Number}}. I really appreciate your help getting that paid for me. It was a great start for my morning. Please let me know if there's anything we can do for you or your team this week.
We appreciate your business and are happy to have you as valued customer,
Take care,
