How do you handle past due invoices?

Past due invoices are a bit tricky to handle. For starters, it is recommended to remind the client through email or phone in a friendly manner. Ask them if they have any concerns regarding the invoice. Be sure to specify the details of the invoice, including the amount and mode of payment. However, if the payment is not received within a reasonable time frame, you may want to send a more formal reminder, like a past due invoice letter. This document serves as a formal notice that the client has failed to clear the invoice on their account and that further action may be taken if payment is not received by a specified date.

What does an overdue invoice mean?

An overdue invoice is an invoice that has not been paid by the due date. The term ‘overdue’ typically refers to payments that are more than 14 to 30 days late. Overdue invoices can cause business cash flow problems and disturb day-to-day operations. This can make it difficult to pay other bills or make other necessary payments. To remedy this at the earliest, send a past due invoice letter.

What is the difference between overdue and past due?

Past due invoices and overdue invoices differ in the number of days they are due. Past due invoices are for payments that are a few days late, whereas overdue invoices are for payments that are significantly late. For example, past due invoices relate to payments that have crossed the due date by three days, one week, or two weeks. At the same time, overdue invoices are late by months, which could mean one month, two months, or even three months.

Does outstanding mean past due?

No. An outstanding invoice is an upcoming invoice — the due date is in the future. In that sense, the client is not late in their payments. Whereas past due means that an invoice has crossed the deadline and the client is late in their payments. In the context of invoices, past due and outstanding are two opposite terms.

How to send a past due invoice email?

If you need to send a past due invoice email, start with a polite greeting, proceed by including all of the pertinent information, such as the invoice number, the amount owed, and the date the payment is due, and end on a positive note.

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Past Due Invoice Template

Prepared by:

Service provider: [Sender.FirstName][Sender.LastName]

Phone: [Sender.Phone]

Email: [Sender.Email]

Address: [Sender.StreetAddress][Sender.City], [Sender.State][Sender.PostalCode]

Prepared for:

Client: [Client.FirstName][Client.LastName]

Phone: [Client.Phone]

Email: [Client.Email]

Address: [Client.StreetAddress][Client.City], [Client.State][Client.PostalCode]

Subject:

(insert subject of the invoice, e.g., Sunrise consulting services invoice (#10021) 7 days past due)

Dear [Client.FirstName],

We regret to inform you that your invoice dated (insert invoice date) and invoice number (insert invoice number) is now overdue.

Per our mutual contract, payment is due within (insert time period) of the invoice date. To date, we have not received payment for the invoice. We understand that there may be extenuating circumstances for the delay in payment, and we appreciate your prompt attention to this matter.

To avoid any further misunderstanding, below are the details of the invoice.

Name	Price	QTY	Subtotal
Item 1 Description of first item	$35.00	5	$175.00
Item 2 Description of second item	$55.00	1	$55.00
Item 3 Description of third item	$200.00	1	$200.00

Mode of Payment:

We accept payment via (insert all the modes of payment, e.g., Cheque/Cash/Bank Transfer/Online Payment). Our payment details are: (insert payment details here)

Please note:

1. Late fee:

If the payment is not received within (insert number of days), a late fee of (insert percentage) will be charged on the total amount due.

2. Interest on late payments:

In addition to the late fee, interest at the rate of (insert percentage) per annum will be charged on the overdue amount from the date the payment was due till the date of actual payment.

3. Non-payment:

In the event of non-payment of this past overdue invoice by (insert date), legal action may be taken against [Client.Company] to recover the invoice amount along with legal charges.

Thank you for your attention and cooperation in this matter. Should you need assistance, please feel free to contact us at [Sender.Phone] or [Sender.Email]. We look forward to receiving the payment at the earliest.

Sincerely,

Signature

MM / DD / YYYY

[Sender.FirstName][Sender.LastName]

[Sender.Company]

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FAQ

Past due invoices are a bit tricky to handle. For starters, it is recommended to remind the client through email or phone in a friendly manner. Ask them if they have any concerns regarding the invoice. Be sure to specify the details of the invoice, including the amount and mode of payment.
However, if the payment is not received within a reasonable time frame, you may want to send a more formal reminder, like a past due invoice letter. This document serves as a formal notice that the client has failed to clear the invoice on their account and that further action may be taken if payment is not received by a specified date.

An overdue invoice is an invoice that has not been paid by the due date. The term ‘overdue’ typically refers to payments that are more than 14 to 30 days late. Overdue invoices can cause business cash flow problems and disturb day-to-day operations. This can make it difficult to pay other bills or make other necessary payments. To remedy this at the earliest, send a past due invoice letter.

Past due invoices and overdue invoices differ in the number of days they are due. Past due invoices are for payments that are a few days late, whereas overdue invoices are for payments that are significantly late. For example, past due invoices relate to payments that have crossed the due date by three days, one week, or two weeks. At the same time, overdue invoices are late by months, which could mean one month, two months, or even three months.

No. An outstanding invoice is an upcoming invoice — the due date is in the future. In that sense, the client is not late in their payments. Whereas past due means that an invoice has crossed the deadline and the client is late in their payments. In the context of invoices, past due and outstanding are two opposite terms.

If you need to send a past due invoice email, start with a polite greeting, proceed by including all of the pertinent information, such as the invoice number, the amount owed, and the date the payment is due, and end on a positive note.

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Subtotal	$230.00
Discount	-$115.00
Tax	$23.00
Total	$138.00