Failure of Payment Notice
How and When to Send Failure of Payment Notice to Clients Effectively?
On average, Americans have $90,460 in debt, according to a 2021 report. It means that companies have thousands of dollars stuck in debts, and they need to strengthen their collections process!
However, getting your customers to pay on time can be challenging, mainly for B2B businesses that work on credit. You risk hurting personal and professional relationships with your clients and tarnishing your reputation. Hence, it is essential to improvise your collection and draft an effective failure of payment notice to regulate your incoming payment flow.
It is common for companies to send payment reminders or past due letters to their clients to speed up payments. But, if your efforts are in vain and they still don’t honor their dues, you may need to send a failure of the payment notice.
Ensure that this notice consists of all the details and encourage the recipient to pay at the earliest. Most people are too busy to realize that they missed a payment. By sending reminders, you can get paid faster, and they can avoid any potential legal trouble.
Some companies send out reminder emails a few days before the due dates. Though that works well for some clients, others need more push. Therefore, try sending your failure of payment notice via a more effective channel, like direct mail. It is attention-grabbing, upfront, and personal.
Keep reading further to know what a payment failure notice is and how it is helpful to businesses! We have also included a failed payment mail template to enhance your understanding of how to draft these letters.
What is a Failure of Payment Notice?
A failure of payment notice is a letter that a company writes to its customers who are yet to complete their payments. It acts as a reminder for the client to honor their unpaid invoices speedily.
These letters don’t have legal implications and only serve as informative correspondence. Yet, it is the last method you can resort to before charging late fees or filing a lawsuit against the client. Try sending at least three failure of payment notice mail before you take the matter to court, as it gives the customer enough time to resolve it.
How Does a Failure of Payment Notice Work?
Suppose you manufacture construction equipment and sell it on credit. Your staff would draft an invoice and mention the payment terms during purchase. Then, they would send a copy to the client and retain one for records.
Often, you would not do anything until the due date arrives. If you receive the payment, your staff will send a receipt or an acknowledgment letter. Otherwise, it is now time to send a failure of the payment notice. Remember to save all copies of your correspondence with your client for future reference.
The same process applies to all companies, wherein they start sending past due letters after the due date. You can send reminder emails a few days before the last date, but it is best to avoid being too pushy.
Generally, a failure of payment notice consists of the following details:
- Your full name and company name
- Your mailing address
- Amount due and the last date
- Specifics of the due payment
- Your plans in case the client fails to make the payment
- Overdue charges (if any)
- Contact information
- Payment options
- Attached invoice
When Should Businesses Use a Failure of Payment Notice?
There is no hard and fast rule when you should send a failure of payment notice as long as it is after the due date. Some businesses wait for over a month to send their first past due letter template, whereas others ship their letters in less than a week. It depends on- the relationship you have with your clients, the payment terms, and your industry.
Initial Failure of Payment Notice
It is more like an informal reminder to ensure that your clients didn’t forget to make the payments. You would be surprised how many debts you can recover simply by keeping in touch with your customers and reminding them of their dues.
Try sending the first failure of payment notice in the first week after the due date to receive payments faster. It is the ideal time to create urgency and motivate clients to act quickly. Attach a copy of the invoice for quick reference.
This letter should let your clients know that you care about them and want to save them from any overdue fees and penalties. Avoid mentioning legal hassles in your initial failure of payment notice, as it may seem unnecessary at this point.
Find below a failed payment mail template or sample that you can send out two to ten days after a client misses the due date:
Michael Trevino Architects
7 Doyers ST
New York City, NY 10013
Date: 1st June 2022
To,
David Mendes
Elements Inc
2088 5th AVE
New York City, NY 10018
Hello Mr. David,
I hope you are doing well! This failure of payment notice is in regards to the renovation we finished at your office a couple of weeks ago. We wanted to inform you that the due date for invoice #78 associated with this contract was due on 25th May 2022, and we are yet to receive the payment.
The total due amount is $_______, and you can pay by either cash, check, or online transfer. Please contact me on the number mentioned on the letterhead if you have any doubts. I will be happy to assist you in any way possible.
I have also attached a copy of your invoice with this failure of payment notice for your reference. You can get our bank information in it.
Requesting you to please pay your dues at the earliest as our company policy dictates an overdue fee of 10% after the 20-days mark.
We look forward to hearing from you soon!
Kind Regards,
Jane Collins
Vice President (Sales and Marketing)
[Signature]
The Second Failed Payment Mail Template
This letter is a little more intense and talks about the consequences of not paying the dues. It is a warning failure of payment notice and lets your clients know that you are considering taking a legal approach to this matter if they don’t pay fast.
Again, this letter does not have legal force, but its intensity can help you recover tons of payments.
Below is a second failed payment mail template you can draft and send if your first letter does not get any response even after two to three weeks.
To,
Richard Burke
Lifeson Hospitals
10 Maple Grove RD
Wooster OH 44691
Hello Dr. Burke,
We are writing this failure of payment notice to bring to your attention that your invoice #806 is still unpaid. Its due date was on 30th April 2022, and we also wrote to you earlier regarding this due bill on 9th May 2022. However, we are still awaiting a reply from your end about your payment status.
It would be greatly appreciated if you could call us back or respond to this failure of payment notice with an update. Please understand that failure to complete your payment can result in legal action and immediate termination of our sales contract.
According to our payment terms, you can transfer the entire amount of $_______ to our account online or send a check to our office address. Please find our banking information and mailing address in the invoice attached to this failure of payment notice.
Feel free to reach out to us if you have any questions or concerns.
Sincerely,
Zack Cooper
Head of Sales (Medical Equipment)
[Signature]
Three-Day Final Failure of Payment Notice
It acts as the last reminder and warning to your clients who fail to pay heed to your requests. At this stage, it becomes obvious that they are ignoring your letters deliberately and have no intention to pay soon. Hence, it is significant to keep up with your efforts and send a final failure of payment notice.
This notice informs the client that they have only three days to honor their dues before your company takes legal action. However, please note that- though this letter helps you initiate a legal proceeding, you still need to talk to a legal representative and complete the necessary formalities.
Here’s another sample you can refer to for sending the final failure of payment notice:
To,
Mary Sturgis
BETA Group of Industries
58 Bayard LN
Princeton NJ 08540
Hello Mrs. Mary,
This letter is to inform you that we have still not received the payment for invoice no.105, which was due weeks ago. You purchased 15 carpets from our showroom in New Jersey City on 15th February 2022.
We tried contacting you via call and email, but there was no response. We even wrote to you two times before sending this failure of payment notice and didn’t get a reply.
Please consider this letter as our final warning to BETA and pay the dues within three days. Your total due amount is $____________, and the bill clearly states that failure to make the payment will result in legal action.
Kindly arrange to resolve this issue right away to avoid the legal consequences and late charges. You can contact us to solve any queries or doubts.
Regards,
Jackson Clarke
Malarkey Rugs Pvt. Ltd.
How to Create and Send a Failure of Payment Notice Using PostGrid?
Now that you know when to send payment failure letters, here’s how to create them:
- Choose a failed payment mail template that best suits your needs and explains your concerns.
- Pull out a list of all your debtors and prepare to personalize your letters. The best way is to use an automated direct mail service like PostGrid that offers variable data printing.
- PostGrid offers several failure of payment notice letter templates you can choose from along with handwriting fonts and sizes. You can customize your letters any way you like, including adding your logo, signature, etc.
- Also, you can use our API integration to draft and send your failure of payment notice right from your system. PostGrid’s direct mail API can fetch the required data within seconds and help you autofill letters efficiently.
Next, you need to decide how to send your failure of payment notice to clients. Again, PostGrid can help you print and mail your letters to the correct recipients. You can choose to send them via Certified Mail or Registered Mail if you need proof of delivery. It allows you to store the recipient’s signature on delivery and use it later as evidence in case of legal disputes.
Below, we have mentioned a few features that PostGrid provides to help you send out the failure of payment notice letters effortlessly:
- Print and mail fulfillment: With our extensive network of reputed printers, you can print your failure of payment notice in the best quality possible at the least price. Also, PostGrid helps you ship them via the USPS, wherein you can assure delivery within three to five business days
- Zero manual effort: Our API helps you to eliminate manual effort and save hours and weeks of your time. You no longer need to stuff letters into envelopes, affix postage stamps, or conduct any such daunting jobs
- Address verification: It is natural for people to change addresses now and then. Hence, it is advisable to verify your mailing lists before shipping out the failure of payment notice letters to clients, and PostGrid can help you with it
- Real-time tracking: PostGrid also allows you to track your mail items in real-time. Hence, you can stay updated and follow up with your clients via other channels accordingly
Wrapping Up
Sending payment collection letters is a regular task for many companies. Such correspondence allows them to lower their debts and increase incoming payments. Hence, it is crucial to plan carefully and take the essential steps to connect with your clients and push them to pay.
Sending a failure of payment notice can aid your company significantly. It informs your clients that you still remember their unpaid dues and are looking forward to receiving them soon. Also, it warns them against any legal problems which could motivate them to pay immediately and resolve the matter.
But, it can be daunting and time-consuming to draft and send these failures of payment notice letters frequently. Hence, PostGrid offers automated direct mail services to help you complete this job online. Also, our all-inclusive solutions and affordable rates make it more convenient and effective for your company.
Request a demo now to know more about how PostGrid can help you send failure of payment notice letters to your clients and boost your collections!
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