Finance Managers: Send first-rated Collection Emails to Get Paid

Clémentine d'Arjuzon

Apr 7, 2022

Summary

What Makes a Good Debt Collection Email? The Strategy Behind Your Collection Emails.

All B2B businesses have one common challenge: getting paid. Even with the best clients, there can be times when invoices are paid late or ignored. 

Collection emails are a straightforward solution to tackle this challenge and improve your A/R. Good payment reminders also help you maintain a positive customer relationship in awkward (but necessary) situations.

A poorly written collection email on the other hand will endanger the relationship your business has spent so much energy establishing. Quality emails are therefore necessary. 

So, what constitutes a good collection email? 

Equally important: how can you write A/R collection emails efficiently? 

Keep reading to find out what makes a collection email efficient. You’ll also discover ready-to-use collection templates and tips on how to make payment reminders more efficient for your B2B business.

Upflow, our A/R collection tool, is one of the ways to automate collection emails in an efficient and personalized way. 

What Makes a Good Debt Collection Email?


The Tone to Use in Your Collection Emails.

A good collection email is one that is simple, personalized, and gets your point across. You want to be friendly but assertive too - the exact balance depends on the type of relationship you have with your client, of course. 

You won’t send the same collection email to a first-time client as you will to a corporate client who’s subscribed to your highest offer for years.


The Elements to Include in a Payment Reminder.

As for the content, here are the elements you should always include in your collection emails (or any communication) regarding a late payment: 


  • A copy of the original invoice - or at least the invoice reference number (which you can put as an email subject line, too)

  • The amount due, including any late payment fee. 

  • The due date: it can be helpful to highlight by how many days the invoice is past due, too.

  • The payment method(s) with a clear “cta” (call to action) to pay. It can be your bank account number or a link to an online platform to pay.

  • A personal touch: use at least your client’s name and company mail, so they don’t think it comes from an email list. The more personal, the better.

  • Your contact information if they have any questions or queries, as well as your business name, to make sure they know what you’re talking about.

Looking for inspiration? Have a look at our free content upgrades.


Collection Emails: What NOT to Do.

Since it can be easy to do a faux-pas when it comes to debt collection, there are a few more things you should pay attention to


  • Become aggressive or rude: Even if the matter doesn’t move forward as you’d like it to, remain civil at all times. Relationships are at the heart of the business, and it’s worth remembering that a customer who has a bad experience is likely to tell people about it. 


  • Be generic: always make your communications personal (you’re talking to a human!) but also send your payment reminders from a personal email address - not [email protected] for instance, which could end up in your client’s SPAMs. Having the same person send various collection emails from the same email is best for clarity. 

  • Let it slide: your A/R collection needs to be followed through like any other project. You might need to send several collection emails, not dropping the ball mid-game is important. Of course, there is a fine line between being consistent and harassment. You have to find the right balance between both, depending on who you’re dealing with. We recommend one action/week after your 4th follow-up. 


The Strategy Behind Your Collection Emails.


Setting Up Your Collection Strategy.

The first step in making your Accounts Receivable collection more efficient is to have a look at a few things in your business, namely: 

  • What your payment methods and payment terms are,

  • Who your clients are (small businesses, big corporations, etc.),

Depending on your payment methods and terms, you will indeed approach the matter differently. 

For example, if you have a subscription-based business that charges their customer monthly via their credit card, you will have a specific A/R process. This process will be different for a business that charges big contracts every 5 years via international bank transfers. 

It’s also important to have a look at your current data to find patterns amongst your customers. You might find that some profiles tend to have a later payment rate than others. 

That’s all good info that will allow you to tailor your payment reminders. Even better, you’ll then have a proactive approach to your collection, being able to solve problems before they arise.


Setting Up Your Collection Email Workflows.

With these insights in mind, you can start designing specific workflows for different subclient groups. By workflow, we mean a series of payment reminders - an initial collection email with various follow-up ones. 

Usually, it makes sense to have: 

  1. An email with the original invoice.

  2. A payment reminder before your due date (if applicable). 

  3. A follow-up after the due date (1-3 weeks after).

  4. A sequence of email reminders after that (1-2 weeks apart).

You can for example set up a workflow for 

  • Clients who pay via credit card, 

  • Clients you have identified as late payers,

  • Clients whose case is about to be escalated.


Having a different workflow for each will make you more efficient. One, because you’ll have all your templates ready to use already. Two, because they are tailored specifically to their target, which means they’re more likely to lead to collection faster.

Remember: it’s all about making it as personalized and easy for your clients. When they’ll know you mean business and they have a clear cta with all the info they need to act on it, they will pay faster.

If that sounds like a lot (and it can take a lot of energy), it might be easier to let an automated collection tool like Upflow do all that for you. Our tool offers in-depth analytics which highlights the categories of accounts that should get your attention. 

Upflow also allows you to send personalized payment reminders from our template collection, straight from our platform. It’s all centralized and integrated with your other accounting and financial tools, for maximum efficiency. 

Collection Emails for Credit Card Failure.

If your clients pay you through direct debit or credit card, you must have a credit card payment failure template. If you have a subscription-based business, a subscription payment failure is what we call involuntary churn.  

Involuntary churn and late payments, in general, can endanger your cash flow as well as your MRR. By setting up an email collection workflow, you can prevent that from happening - or at least reduce its occurrence. 

When a credit card payment doesn’t go through, it’s either because there was a problem with the card (spending limits reached or card expired) or a problem with the account (not enough funds). 

Either way, it’s good to address the matter directly by sending an email to your clients as soon as it occurs. A payment failure notification will let them know that there was a problem and, with proper instructions, allows them to correct the situation ASAP. 

Sometimes, you’ll need to send a second (or even a third) reminder to update their payment details. Here are a couple of scripts with the same message but with a slightly more assertive tone for the second collection email.


First Collection Email for Credit Card Failure:


Hello (Client name)


We hope this email finds you well! 

As there was a problem with your credit card, your last payment for your invoice (XXX) for a total of (XXX) didn’t go through. 

Could you update your payment method by clicking on this (link)? We would appreciate a prompt payment upon receipt of this email. 

You will find a copy of the invoice (attached to this email/linked here). 

If the matter has already been solved, please ignore this notice. 


Best, 

(Your Name)

(Your contact info)



Follow-up Email Template for Credit Card Failure:


Hello (Client name)

 

We’re reaching out again regarding the payment of your invoice (invoice number) for a total of (invoice amount) due on the (due date)

You will find a copy of the invoice in question attached to this email. 

As your automated payment didn’t go through, we’d appreciate a prompt payment upon reception of this email. 

You can update your payment method by clicking on this (link). 

Please let us know if you have any questions or problems. 

If you have already paid, please ignore this notice. 


Best, 

(Your Name)

(Your contact info)



Collection Emails for Late Payers.

When you know which clients or subclients groups are susceptible to paying you late, you can be proactive about the matter. This will allow you to prevent late payment rates and lower your DSO.

Being proactive means having more payment reminders - after the invoice due date but before it as well (if you don’t require payment-on-receipt). Consider it a gentle prompt for them to pay on time, so they make sure your payment goes through on time.

For late payers, we recommend 

  • An email 1 week before the due date - but after your invoice has been sent if it isn’t due on the day.

  • An email 1 week after the invoice due date

  • An email 2 weeks after the invoice due date

Have a look at our free email templates and set-up an effective collection strategy.


Email Collection Template for Late Payers - 1 Week Before Invoice Due: 


Hello (Client Name), 


We hope you are doing well! 

We’re reaching out to remind you that the invoice (invoice number) of (XXX) is due next week. 

You’ll find a copy of the invoice (attached to this email/linked here). 

You can pay by (payment instruction). 


Many thanks, 

(Your Name)

(Your contact info) 



Email Template for Late Payers - 1 Week After Invoice Due Date: 

 

Hello (Client Name), 


I am contacting you about the outstanding invoice: (invoice number) for (XXX) due last week.

Can you confirm that this invoice has been recorded by your accounting department and give us an estimated payment date? 

You will find a copy of the invoice in question attached to this email. To pay this invoice, you can (payment instructions)


Best wishes, 

(Your Name)

(Your contact info) 



Email Template for Late Payers - 2 Weeks Overdue: 


Hello (Client Name),


We are contacting you as part of our outstanding invoices follow-up. The invoice number (XXX) of (XXX) was due on (due date)

Unless mistaken, we still haven’t received payment for the invoice above. You will find a copy of the original invoice (attached to this email/linked here). 

We would appreciate a swift payment to settle this matter. To pay this invoice, you can (payment instructions)

We are also available to discuss any issue you may have. 


 Best, 

(Your Name)

(Your contact info)


Collection Emails for Escalation.

Sometimes, clients don’t pay you. You’ve tried sending emails, or even contacting them over the phone (you’d be surprised how swiftly some situations can be solved with a phone call), but the payment still hasn’t gone through. 


It can be a stressful situation, especially if it starts to endanger your own cash flow, which is likely for small businesses. Keeping on top of your unpaid invoices should be a priority, and you don’t want to leave the matter to magically settle in the background (plot twist: it rarely happens).

So after you’ve issued several payment reminders, it’s time to escalate your payment collection emails

How do you do this? By increasing the assertiveness of both the tone and content of your email. It’s usually the time to mention taking legal actions and/or to involve upper management in the discussion.

We also recommend sending formal letters - they have a very official touch to them. You’ll find below templates you can use both for emails or letter-writing. 



Email Collection Template for Escalation: 


Hello (Client Name),

 

We are contacting you regarding your outstanding invoices, the total of which amounts to (XXX). Your oldest invoice is overdue by (XXX) days. 

As per our T&Cs, we require payment (payment terms)

Here is a summary of your outstanding invoices: 

  • (Invoice number) for (invoice amount) due on (due date),

  • (Make a list)

You will find a final invoice attached to this email. We would appreciate immediate payment upon reception of this email. 

You can pay by (payment methods and instructions).

If we haven’t received payment by (timeframe), we will regrettably have to (restrict access to our services and/or take further action soon).


Best wishes, 

(Your Name)

(Your contact info) 


Email Follow-up for Escalation:


Dear (Sir or Madam),


Despite several reminders, your company has not paid yet the following invoices that are past due: 

  • (List of invoices with reference numbers, amount and due date)

You will find a copy of all the aforementioned invoices attached to this email. 

We have already (action taken, such as service restriction) and demand that you proceed to the payment of (XXX) within (timeframe).

If you fail to do so, we would have to take the matter in front of (the proper jurisdiction / a collection agency) and ask for compensation for our financial loss.

We look forward to hearing from you,


Regards,

(Your Name)

(Your contact info)


If you liked these templates, there is more to find inside Upflow, our A/R collection tool. The best part? You can automate these reminders and personalize them, too, so you can focus on higher-value tasks. 



Key Takeaways: 


  • Setting up various collection emails workflows allows you to be proactive and efficient in your A/R collection process.  

  • A good email payment reminder has a friendly yet assertive tone. It also contains all the information needed for your client to pay you straight away. 

  • Your communications should always remain polite, personal, and consistent for maximum efficiency.


  • Mapping out your payment processes and who your late payers are will help you to set up a relevant email strategy. 

  • Using pre-written templates will facilitate your A/R collection process.


  • Automating your email collections workflows assures that you get paid on time and focus your efforts on higher-value projects.

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