Debitoor's accounting dictionary
Reminder letter

Reminder letter - What is a reminder letter?

A reminder letter – also called a payment reminder, or simply a reminder – is a document sent to a customer to prompt them to pay an overdue invoice.

Debitoor invoicing software helps you get paid faster. See when invoices become overdue, and follow up late payments with reminder letters. Try Debitoor free for 7 days.

If a customer is late paying an invoice, sending a reminder can help you get the money you are owed. While there are legal steps that ensure you will get paid, a reminder can serve as a quicker, easier, and more friendly way to ask for payment.

When should I send a reminder letter?

You should send a payment reminder within a few days of the invoice becoming overdue. An invoice is considered overdue once if it is still outstanding past the due date outlined in the payment terms.

In the UK, businesses can set their own payment terms. For example, you may ask for payment upfront or offer a discount for early payment. If you agree on specific terms, a customer is legally obliged to make payment within this timeframe.

If no specific terms are agreed, customers must pay within 30 days of:

  • Receiving the invoice
  • Receiving the goods or service (if this later).

If a customer does not pay after the first reminder, you can send second, third, and final reminders. After this, you may consider looking into alternative options if your business is owed money such as mediation or a statutory demand.

What should I include in a reminder letter?

A first reminder should be polite and remind your customer that their payment is overdue without assuming intentional wrongdoing - your customer might have just forgotten or have had issues with a bank transfer. A polite, friendly reminder can resolve the issue without making any unfounded accusations.

If the debtor still does not pay, you can send additional reminders. Your tone should always be professional, but each reminder should be increasingly assertive, stressing the urgency of the message you are trying to get across.

The final reminder letter should refer to previous attempts to ask for payment, and should warn customers of any further action you will be taking.

Can I charge late fees on overdue payments?

Whether or not you decide to charge late fees is up to you. It’s very common to add late fees of 2-5% that increase with each reminder. Under some circumstances, you may also be able to charge interest on commercial debt.

Reminder letters in Debitoor

With Debitoor invoicing software, its easy to see when invoices are overdue.

Our reminder letter templates help you ask for overdue payments and you can add your own message and late fees. With 'Friendly', 'First', 'Second' and 'Third' reminders, Debitoor makes sure you get paid.

Debitoor invoicing and accounting software helps small businesses and entrepenuers get paid faster with reminder letters

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