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Debt Recovery

Payment Reminder Letters

The documents in this folder have been drafted to help businesses who are owed money by their customers. If you are in this position, the ideal place to start is the Guidance Notes: Debt Recovery and Taking Legal Action. These Guidance Notes run through possible courses of action when debts are outstanding. The Guidance Notes include reference to debt respite legislation which provides some protection from debt collection for certain individual debtors, and you will need to consider whether and how it applies before you take any steps aimed at obtaining payment.    

This folder focuses on the first stage of debt recovery – the sending of reminder letters. A reminder letter may prompt a customer to pay, or to enter into a dialogue with the business about the debt, and this may mean that more drastic action can be avoided.

If the amount owing represents more than one invoice, a statement of account should be prepared and enclosed so that the balance payable can be easily verified.

All these documents are professionally drafted, are in Microsoft Word format and can be edited as required.

Payment Reminder Letters is part of Business . Just £38.50 + VAT provides unlimited downloads from Business for 1 year.

Frequently Asked Questions

An invoice is overdue. What is the best first step? +
Send a reminder letter. It is the cheapest and least confrontational first step and often prompts the customer to pay or to get in touch about the debt, which can head off more drastic action. Starting with a polite but clear reminder also shows you acted reasonably if the matter later escalates. This sub-folder provides reminder letters for that first stage.
How many reminders should I send, and what should they say? +
A short sequence of increasingly firm reminders usually works best, starting friendly and becoming more formal. Each should state the amount outstanding, the invoice numbers and dates, how and by when to pay and what will happen if payment is not made. Keeping the facts clear and consistent makes the debt hard to dispute and prepares the ground for any later action.
Should I include a statement of account with a reminder? +
Yes, where more than one invoice is outstanding. A statement of account sets out the invoices, any payments made and the balance due, so the customer can easily verify what is owed. That removes a common excuse for non payment and makes the total clear if you later take action. Enclose it with the reminder for anything beyond a single invoice.
Can I add interest and charges to a reminder for a commercial debt? +
Yes. For a business debt you can claim statutory interest of 8% above the Bank of England base rate, unless the contract sets another rate, and fixed compensation of £40, £70 or £100 depending on the size of the debt. You can set this out in the reminder and add it to the sum demanded. Doing so is often a useful prompt to pay, as the amount owed will keep rising.
The customer is an individual. Is there anything I must check before chasing? +
Yes. If the individual is in a Breathing Space under the debt respite scheme, you must pause contact and enforcement for the 60-day moratorium, so check first. For individuals and sole traders you should also follow the Pre-Action Protocol for Debt Claims before starting court action, which affects how and when you escalate beyond reminders.
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