Is piling up past due invoices a concern for you? Well, you aren’t the only one who faces such challenges. If you’re running a business for a while, then you know sometimes you get paid early, or else have to deal with late payments.
The latter could be a real concern because more than 25% of unpaid invoices would require at least 3 reminders before you finally receive the payment. However, you can reduce the number of outstanding invoices only by streamlining the accounts receivable collection process or using automation software.
Alright, since you are here, you are probably dealing with past-due invoices. Let’s be honest, you need to secure the payments from those invoices, right? For that, one of the key factors is to calmly request payments from clients without spoiling your relationship. Because you want them to be repeat customers for future purposes.
📌 Key Takeaways
- Any invoice that hasn’t been paid by the due date falls into the past due invoice category.
- 6 steps are all you need to improve the past due invoice collection process.
- It is recommended to follow a past due invoice template rather than sending a random email for payment reminders.
- By following the right email template for overdue (30 days, 60 days, or 90 days), there is a better chance of getting the payment ASAP.
- Moon Invoice is your all-in-one solution for seamless invoicing and payments.
What Is a Past Due Invoice?
A past-due invoice is an unpaid bill indicating that the recipient has failed to make the payment even after the due date has passed. It reminds the buyer to fulfill their payment obligations immediately to avoid accumulating late penalties.
Sellers typically set short payment terms, such as Net 15 or Net 30, on an invoice. If an invoice surpasses its due date, it is considered past due. When past-due invoices start piling up, they can significantly impact your bottom line and may lead to financial instability.
Now, let us tell you how to collect past-due invoices in 6 steps so that you get paid quickly.
💡Pro Tip: Automate Overdue Invoice Emails for Better Recovery Rates
Manually tracking and sending overdue invoice emails or past-due notices can be time-consuming and prone to errors. Instead, use invoicing software like Moon Invoice to set up automated past-due invoice reminders using a customizable overdue invoice email template.
How to Collect Past Due Invoices
Explore these 6 steps to help you receive payment for past due invoices as soon as possible.
1. Identify Overdue Invoices
Collecting past-due invoices requires patience whenever you deal with overdue payments. Remember to make sure that it is a past-due invoice and not an outstanding one.
This is because a past-due invoice appears only after the due date has passed and you still haven’t received the payment. At this stage, confirm that all you have in hand are past-due invoices and that the information is correct.
Also, check if you have recently made any payment requests to clients. There is a minimal chance that you will get paid even after 60 or 90 days, so it is better to put your plan into action.
Generate a report using invoicing software like Moon Invoice so that you get a clear idea of the unpaid amount and the time overdue.
2. Issue an Overdue Notice
When you have a list of past-due invoices ready, now is the right time for a nudge. You can issue the overdue notice or past due notice to the client, reminding them about outstanding payments that need to be cleared as soon as possible.
Sometimes, late payments are only because clients have forgotten to pay dues, and all it requires is a gentle reminder.
In other cases, customers may have issues regarding payment processing, so ask them to settle dues using different payment methods. You can list different payment methods in the email while requesting payment, so that anyone having issues with payment can transfer money online.
This primary notice is only to remind them of payment terms and conditions that they might have agreed to before using your service.
3. Follow-up (If Required)
If sending an overdue notice doesn’t help you recover past dues, consider sending a follow-up email. Undoubtedly, there is no harm in setting a tempo and sending email reminders until you get paid.
Encourage your accounts receivable team to take action and prevent past due invoices for more than 90 days, which might become uncollectible. While sending a follow-up email, you must clearly highlight the consequences of non-payment within the given time frame.
Keep in mind that your goal is to receive payment without burning the bridges, so it’s better to use your professional tone. Rude language will not only cause delays in payments but also negatively affect the relationship.
In most cases, what customers need is a short and gentle nudge to process a payment.
4. Contact Your Customer
Following 2-3 past-due invoice reminders, you would have decided to contact the customer by phone, and that should be your next move. Connecting over the phone will at least help you initiate the conversation with the clients.
So, keep a script and a copy of the past-due invoice ready before you dial the phone number, as clients may ask multiple questions. Once connected, you can get answers from clients regarding lengthy delays in receiving payments, even after sending email reminders.
Below is one such example of how your call script should be for starting the conversation about past due invoices.
Hey Carlos,
Sara this side, from XYZ Company. How are you today?
I’m calling to discuss an important matter regarding invoices that have passed their due dates. I wanted to touch base with you to check if there’s anything we can do to assist in getting these dues cleared up.
I understand that sometimes there might be a specific reason for the delay. So, is there something on your end that has resulted in the payment delay?
5. Discuss With the Accounts Team
Even after making a phone call, if the payment is somehow not received, then there are strong chances of a dispute, which you should not let happen, no matter what. Therefore, hold talks with the sales or accounts receivable team because they usually have a healthy relationship with customers.
Let your account manager engage in conversations with clients to answer their queries and encourage them to clear their dues. If efforts made by your account team are not enough, you may have no choice but to approach a debt collection agency.
6. Start Legal Proceedings
When nothing works in your favor, the last option is to start taking legal action by knocking on the door of Small claims courts. Imposing late fees and continued delays in payments can only hurt your business. So, it’s better to hand over the matter to the court instead of making an effort that won’t even be worth it.
Initiating legal actions may require guidance from legal professionals. Discuss with lawyers about clients being unresponsive for such a long time. It is advisable that you know the complete legal procedure before escalating legal actions against past due accounts.
Forget Chasing Unpaid Invoices for Once and All
Invest no more time in chasing past due invoices. Make professional invoices using Moon Invoice which helps you get paid faster.
Past-due Invoice Email Templates
While preparing email reminders manually requires a lot of time, it is better to get ready-made templates that help you create and send them professionally.
Here are some examples of writing an overdue invoice email template.
Past Due Invoice Email – After 30 Days
Your first email after completing 30 days from the due date should be formal and direct to the point. A use of politeness is important, but email should create a sense of urgency.
Professional emails made using templates will grab customers’ attention in a minute, leaving no chance of oversight and accelerating the payment process.
Here’s an example of a 30-day past due invoice template:
30 days Past Due Invoice Email Template
Subject Line: Payment Reminder of Balance Due for Account [ #0023]
Hello Steve,
This is a friendly reminder that your payment for Invoice [#Invoice Number], dated [Invoice Date], is now 30 days past due. As per our company’s policy, a late fee of [X amount] has been added to the outstanding amount.
We request you to settle your payment dues quickly.
If you need to discuss anything regarding payment queries, please contact us at [phone number].
Thank you for your attention.
Sincerely,
Kevin
Head of Sales Dept -[Company’s name]
Past Due Invoice Email – After 60 Days
If you haven’t received the payment 60 days after its due date, there is certainly less chance of you getting paid.
This time, you need to prepare a firm email—more like sending a past due notice rather than drafting a politely worded one. After 60 days, you can also follow up via phone call after sharing an email.
Your past due invoice email template post 60 days should be like this:
60 days Past Due Invoice Email Template
Subject line: Immediate Action Required – Payment Due for Account [#0023]
Hello Steve,
I’m reaching out to follow up on Invoice [#Invoice Number], which is now 60 days past due.
Despite our previous reminders, the outstanding balance of [Amount Due] remains unpaid. It’s important that we receive payment immediately to avoid any further action, which may include permanent closure of the account or referral to a debt collection agency.
Please let us know if you need any additional information or if there are any issues preventing payment.
Ignore this notice if you have already made the payment.
Thank you for your immediate attention.
Sincerely,
Kevin
Head of Sales Dept -[Company’s name]
Past Due Invoice Email – After 90 Days
If your previous effort didn’t pay off, after 90 days, you have a strong chance of contacting the debt collection agency rather than waiting for a payment.
Approaching a debt collection agency can lead to serious consequences for customers. Therefore, it’s better to send a final notice reminding clients about starting legal proceedings.
Upon the completion of the 90 Days, the email should be like this:
90 days Past Due Invoice Email Template
Subject line: Important Notice: Payment Due for Account [#0023]
Hello Steve,
Despite contacting you several times via email, we have failed to receive the payment from your side. Since your invoice is now 90 days past due, unfortunately, we have to hand over this matter to the collection agency.
We strongly encourage you to address this issue as soon as possible to avoid any consequences. If you have any questions or require assistance, please contact us immediately.
Thank you.
Sincerely,
Kevin
Head of Sales Dept -[Company’s name]
When to Send Payment Reminder Messages?
As a seller, you can dispatch the payment reminder right after the invoice is due—or even before, when you’re approaching the due date. Sending a past due invoice reminder before the deadline can help urge clients to stay on top of their payment responsibilities.
If the client has a solid history of timely payments, you may send an overdue invoice email a few days after the due date. Use a professional overdue invoice email template to maintain a consistent, polite, and efficient follow-up process.
In cases where the client is known to delay payments, it’s better to send a past due notice immediately after the due date passes, requesting payment as soon as possible. Since every invoice can have different terms, it’s crucial to ensure that reminders are only sent after the agreed payment window has closed.
💡Pro Tip: Create a Sequence of Past Due Invoice Reminders
Don’t rely on a single reminder to recover payments. Instead, build a structured follow-up strategy using a series of past-due invoice templates—each designed to the timing and tone appropriate to the payment stage.
Effective Tips for Following Up Past Due Invoices
Here are some actionable tips to remember while taking follow-ups for past due invoices.
1. Clearly Define Purpose
Let the recipient know why you’re contacting them. A well-written overdue invoice email clearly states the outstanding balance and due date. Leverage a professional overdue invoice email template to ensure your message is clear, concise, and aligned with business etiquette.
2. Fill in Accurate Details
Always double-check the invoice number, payment amount, and due date before sending a past due invoice reminder. Instead of manually drafting reminders, use invoicing software to automate and personalize your messages with the right information.
3. Use Professional Tone
Your past due notice should sound polite yet firm. Avoid sounding aggressive or overly casual. The tone you choose reflects your brand, so make sure it communicates professionalism while maintaining a client-friendly approach.
4. Offer Multiple Payment Options
Enhance your overdue invoice email by attaching payment links or mentioning available payment methods. Offering flexible, cashless payment options can help the client act immediately upon receiving the reminder.
5. Don’t Use Aggressive Language
Avoid using harsh or accusatory language that may harm your business relationship. Politely explain the urgency of the matter and the importance of settling the balance. A well-drafted past due invoice template helps convey the message without sounding confrontational.
Moon Invoice – The Only Invoicing & Payment Solution You Need
Collecting past due invoices can be a daunting task, but it doesn’t have to be when you are using Moon Invoice. An invoicing software, Moon Invoice, is equipped with advanced features that will not only help you make beautiful invoices but also draw payments faster.
With Moon Invoice, you no longer need to waste time making invoices from scratch. Get ready-made invoice templates from Moon Invoice, fill in the required details, and send a high-quality invoice directly via online platforms.
If required, you can even get the benefits of readymade email templates to send a professional payment reminder. That’s not all; you can even track outstanding invoice, get notified about early payment discounts, and dispatch automatic payment reminders.
Reduce Past Due Invoices With Moon Invoice
Generate professional-looking invoices using Moon Invoice and encourage your clients to make payments in no time.
Conclusion
Businesses dealing with frequent late payments can face serious problems in their daily operations. No business has extra time for constant follow-up with past-due invoices, as this can make the business financially unstable.
Agreed, there are ways to recover payments, but taking preventative action before such a situation arises can save you time and effort.
Using automated invoicing software is your only solution to such recurring problems. Software like Moon Invoice will eliminate your struggle of chasing unpaid invoices.
You can generate perfect invoices with readymade template designs and integrated payment options that significantly reduce past due invoices.
Start using Moon Invoice for free.
FAQs
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
