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Payment Letter Template

If you need to collect debts, then the first step would be to send out a payment letter. But what is the correct format for the same? In this article we give you the format for such a letter and a sample letter that will help you draft a letter for your purpose.
If there is one task that most people would try to wash their hands off, it would be trying to get someone to pay off their debts. It is never easy to collect money from someone especially from people who are habitual defaulters. There are also many people who constantly disconnect calls when you try to talk to them about collecting money. In such a scenario the only way out is letter writing. Drafting a letter that is properly formatted to sound polite is a good way of reminding someone of the fact that they are overdue on a payment that they are supposed to make. A well drafted late payment letter also serves as a proof in case of legal issues later on, that the concerned person has on several occasions been reminded of his defaulting, and despite this he has failed to make the necessary payments. A template ensures that the letter you draft has all the necessary details as the template serves as a guideline for the letter writer.

Template for Letter for Request for Payment

A well-written late payment letter ensures that the letter you are drafting has all the necessary details and is well written without sounding impolite. A late payment reminder letter needs to be persistent without sounding rude.

Your Name
Your Organization
Organization's Address

Date

Name of Addressee
Addressee's Designation
Address

Reference: In this section you need to mention subject of the letter briefly and concisely.

Salutation/Greetings
Dear Ms./Mr. (addressee)/ To whomsoever it may concern

The first and introductory paragraph of the letter should tell the addressee why you are writing this letter. This will inform the reader that they have defaulted on their payment on the bill that was sent to them by your organization. Do mention the date on which you had sent the bill to the addressee earlier so that he or she is informed of the same. Also send a copy of the invoice with this letter so that the addressee does not have the excuse of not having the invoice and also is made aware of the overdue amount.

In the second paragraph, you need to mention details of by when your organization expects the addressee to make the payment. Mention both the amount to be paid and the date by which it needs to be paid. Also ensure that you make the addressee aware that in case the payment is not made, the addressee is liable to face legal action.

In the third paragraph, you need to assuage the fears of the addressee by saying that you believe that legal action would be completely unnecessary. Also ensure that you mention that in case the addressee has already made the payment, they should ignore this letter. Apologize for the letter in such a scenario. End the letter by giving your contact details in case the addressee needs to contact you for any kind of clarification.

Valediction/Goodbye
Yours sincerely,
(Signature)
(Your name)

Sample of Letter of Payment

Now that you know what the proper format is, let us take a look at a sample of a payment letter, that will help elucidate the format of the letter better.

John Samson
Accountant, Mssrs. Devon and Graham
Oak Street, Cook County
Illinois - 242574

Date: August 18th 2010

Carla Grayson
8265 - Elm Park
Cook County
Illinois - 242897

Reference: Late Payment Reminder, Invoice # 4635789

Dear Ms Grayson,

This letter is to remind you that as of today you have defaulted on an outstanding payment of USD 4000 on the invoice no # 4635789 which was first sent to you on the 1st of July 2010. We are yet to receive any sort of communication from you regarding the payment of that invoice. Along with this letter we have enclosed another copy of the invoice for your reference.

We request you to kindly make the complete payment of the amount mentioned herein (USD 4000) by the 30th day of this month, that is August 30, 2010. In case you default on this payment, the company will be forced to take legal action against you to recover the payment.

We believe that legal action would not be necessary and therefore, request you to make the payment on invoice no # 4635789 as soon as possible. In case you have already made the payment, please dismiss this letter. We apologize for the inconvenience caused in case you have already made the payment. In case you need to contact us for anything, our contact details are listed on the invoice enclosed.

We would like to thank you for all your cooperation.Thank you for your cooperation and hope that you will continue to do business with us in the future.

Thanking you,
Yours sincerely
(Signature)
John Samson
Accountant, Messrs. Devon and Graham

As a person who has received such a letter and who needs more time to make the payment, you can send out a letter known as a late payment explanation letter that will explain to the organization understand your situation and the reason due to which you have defaulted on the payment. As with other forms of business writing, a letter should always be properly drafted. While a template determines that a letter should balance the fine line between polite and authoritative, in case you have sent out many reminders the tone can be more authoritative and persistent than polite. No one wants to default on a payment. There is always some financial crisis or reason for doing so. So, do ensure that you maintain a certain degree of politeness in the letter.
By Tulika Nair
Published: 8/17/2010
Bouquets and Brickbats
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