Sample Collection Demand of Payment Letter - Strategies you should use to collect payment before you send the letter

Sample Collection Demand of Payment Letter - Strategies you should use to collect payment before you send the letter
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Tips to Try Before you Send the Final Letter

If you have to pen the letter to demand payment from your client, to find out the tone of the letter and the points to include, it helps to refer to a sample. Collection demand of payment letter writing is a pain for you and drain on your resources. True, it’s an unnecessary burden thrust on you by some clients. You supply a product or render a service in good faith. If customers don’t pay on time, or if they have no intention of that at all, the consequences can choke the arteries of your business. Yet, you’ve to swing in to action to keep the pulse of your venture ticking. And, the sooner you act the better. Here are some tips and a sample collection demand of payment letter that can drive you on the track to a successful collection.


Empathize with the client: It may be just a glitch in the company’s accounting software that’s delaying the check or online transfer of funds to your account. Or, the business may be facing an unusual situation because of an intra-departmental staff shuffle or a major policy overhaul. Call your client or send them an e-mail and ask when the dust will settle down.

Emphasize your efforts: When you communicate with the defaulting customer, pinpoint how efficiently you’ve met the terms of the contract. Tell the client how cash is the life line of your business and that you too have obligations to pay your staff, freelancers and vendors while meeting your own personal expenses. This communication strategy has the potential to touch the emotional plateau of the client and help you collect your payment.

Focus on assertive communication: As each day passes without the check in the mail or fund remittance to your account, despair, restlessness or anger could try to defeat rationale thinking. The spur of the situation would make you write an angry e-mail or engage in a high-pitch telephonic conversation. But, don’t let the situation control you. Relax, take a deep breath. Wait till your feelings fade. Then, communicate professionally and assertively.

Use tact to get your money: Perhaps the client is in financial trouble and is thus unable to pay you. Or, the company may be waiting for the new management to take over. Thanks to a recent acquisition. All these place a question mark on if and when you’ll get your funds. Talk to the client and get the pulse on what’s going on in the company. If you feel that the fluid situation further hinders the collection of payment, explain your difficult situation and request them to pay. If that doesn’t work, offer to reduce the amount due. The customer would agree to settle the amount or take steps to make the new owners give priority to your invoice.

Is the communicate-wait-negotiate technique not working for you? Then, send a collection demand of payment letter to the client.

Use the letter for collection demand of payment as the last strategic weapon in the process of payment collection. In fact, it would be best to chalk out a way with your client to get your money without having to send a final notice. Why? Many small businesses would not afford to sue the client and get caught in the legal wrangle. Of course there are exceptions, yet you should strive to work out a win-win solution first.

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Points to Present and a Sample Letter

Here is a letter sample. Collection/demand of payment letter copies should be professionally written and clearly stated. The letter should include the money amount the client owes you, the products and services you have supplied/rendered, the days your invoice is past due, your futile endeavors to collect the money and the action you are going to take if the customer fails to settle your invoice.

September 9, 20XX

Final Collection Demand of Payment Notice

Dear Mr. Doe,

My lawyer has reviewed the Widget International-XYZ, Inc. contract and is of the opinion that your company has breached it. If you fail to make payment as specified in this notice, I will initiate legal action.

I have talked to you several times and sent you several e-mail about Widget’s invoice to XYZ for $30000 for the e-learning training courses Widget has designed, developed and delivered exactly as per the terms of its contract with your company. You have had said you were happy about the quality of Widget’s work and that your staff has been finding our training modules an excellent fit with their on-the-job needs. Yet, you haven’t made the payment, which is already 90 days past due.

I have been trying to reach you since several days, and you’re deliberately avoiding me. Your secretary always replies like “he’s not in today, can I take a message?” “Mr. Doe is out-of-town,” or “he’s in a meeting.” The messages I have left have never seen the light of the day. Further, except for the few initial replies from you for my e-mail, you’ve also stopped responding to my messages.

Not that you don’t know, understand that cash is a main catalyst for Widget, a small business. My staff and freelancers have placed great faith in me and worked tirelessly, contributing their talent and experience toward creating great e-learning training modules for your company. I have drained most of my emergency personal funds and paid all those who’ve worked on your project, to fulfill my obligation. Without your payment, my business and personal life will experience extreme financial hardship.

Treat this letter as the final notice and wire transfer the full invoice amount of $30000 to my account on or before September 15, 20XX by 5:00 p.m. EST. My account details are as follows:

Name of the Bank: Great First Bank

Account Number: 123456789

Routing Number: 1552553


John Nomoney


Widget International