11 tips for setting up payment reminders that get results

Sep 20, 2021

payment reminder

Estimated reading time: 5 minutes

Sooner or later, everyone has to deal with unpaid invoices. They must be followed up quickly and correctly. The first step is to send a friendly payment reminder. In this article we explain how best to formulate and send this payment reminder.

1. Choose the appropriate communication channel

Before you start thinking about the content of the reminder, it is best to consider which medium you are going to use. This can be in writing by e-mail or letter, by telephone or by text message.

Different generations do not always appreciate the same method of communication, something that health institutions, for example, struggle with. Some may like a phone call, for others an email or text message will suffice.

In some cases it is useful to combine different channels with each other. First you send emails, which offers the opportunity to do a mass-mailing. Then you send a text message, which is something we often see in B2C communication. The next steps may then include a letter and a phone call. At the end of the process, you may want to use registered mail.

2. Choose the appropriate message and tone of voice

As you are doing the chasing, it’s up to you to set the tone of the discussion. What communication style should you use in the payment reminder?

Every day, companies and employees are inundated with communications. Therefore, your payment reminder should stand out and you must give it your own style. A personal style increases recognition and prevents your reminders from ending up in the spam folder or trash.

Also be aware that you are sending a message to someone who has already purchased your product but has not paid for it.

The communication style also changes over time. The first communication is ideally collaborative in tone. Further along the process, communication can be more targeted and direct.

In any case, you must clearly state who you are, why you are getting in touch, what the problem is, and the steps that need to be taken to resolve it.

3. Be empathetic

Don’t start by pointing fingers or adopting an aggressive attitude in your communication with the customer. In most cases, the customer simply forgot to pay, or was even unaware that the payment had not been transferred.

Therefore, be friendly and professional towards the debtor throughout the process.  

4. Be brief and to the point in your payment reminder

It makes no sense to cover several pages or write an endless email when sending a payment reminder. This is not only unnecessary; it discourages fast and direct payment.

Therefore, state precisely what you expect from the debtor.

5. Vary the content of your subject line

We already mentioned that it is best to vary the content of the payment reminder. And this applies not only to the body text of the email, but also to the subject line. That’s the first thing customers see in their mailbox. For example, Gmail lumps e-mails with the same subject line into one pile, which means that customers easily miss this communication.

Tip! It is best not to mention that this is a first or second payment reminder in your mail. Why? Because the debtor will then expect further reminders to follow and will postpone payment further.

6. Provide the invoice details

In the payment reminder, you must indicate which outstanding invoice it concerns. Mention at least the following:

  • The invoice number
  • The invoice date
  • The original due date of the invoice
  • The new final payment date, or a specific payment deadline for the invoice
  • The outstanding balance
  • The account number to which the invoice must be paid

It is even more informative if you provide the invoice in question. Then all the necessary data is accessible to the customer and he or she knows exactly what you are talking about. Attach the invoice or provide a link to the online invoice.

This way you avoid the typical excuse that a customer can no longer find the original invoice, which enables them to decide when (and whether) to take action.

The purpose of a payment reminder is to prompt your customer to pay. A great solution is to include a live payment link directly in the reminder.

This link can be used very flexibly: in e-mails the payment link is behind a payment button; in a letter, the link becomes a QR code.

8. Use the email address of a real person

People often receive emails from an address that is something like billing@companyabc.com  But a number of studies have revealed that emails sent from an email address with a real person’s name have open rates that are 15 percentage points higher than emails sent from a generic address. A personal name radiates more trust and accessibility.

9. Reiterate the benefits of your product or service

When you send a reminder, it makes sense to underline the benefits that the customer enjoys from your product or service. This starts the thinking process that your company remains a useful supplier or partner to the customer.

For example, use the PS at the bottom of the email for one of the following:

  • The addition of a new feature
  • A link to a customer success story
  • A link to a blog

10. When should you send out the payment reminder?

It is best to send a payment reminder as soon as the payment deadline has expired. It is advisable not to wait too long with this, otherwise it will appear that you do not take your own payment terms seriously, and the customer will do the same.

Keep in mind, however, that the amount can still reach your account a few working days after the due date. After all, the payment reminder and the payment can intersect.

You can also be more responsive and proactive. Two days before the payment term expires, why not give your customer a gentle and friendly nudge, e.g.: “Are you forgetting something?”

11. Automate payment reminders

You can choose to send payment reminders manually but following up is a time-consuming process.

It is more efficient to do a mass-mailing. Specialised credit management software such as iController will let you know when to take follow-up actions on a particular customer, depending on the relevant follow-up procedure.

In this way you take credit management to a higher level, and you further optimise your company’s cash flow.

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