Money is always exchanged for either a product or a service. But this money may or may not be paid before the product is purchased or the service is used. These days there are quite a few payment options under which one can buy a product or use a service. For example, one option is to pay a certain amount in advance and the balance on delivery of product or at the time of actually using the service. The other option may be to pay a certain percentage of the total amount towards advance and the balance in installments. These are basically ways and means of attracting customers.

A Payment Letter however comes into the picture when:

  1. It is written by the company when the customer has not made the payment towards a product or service
  2. It is written by the customer when s/he wants to make a payment towardsa product or service
  3. Is written by a school or college when the student’s parents have not made the payment towards a trip or an extra curricular that is due from them

A Payment Letter may be written just as a gentle reminder to someone that a payment is due or it may also be written as a firm reminder for any overdue payment.

DOS AND DON’T’S OF PAYMENT LETTER

  • A Payment Letter should be written well in advance of the due date
  • It should always carry a date on the top left corner indicating its origin
  • If a Payment Letter is a reminder to a previous letter then the date of that letter should also be mentioned in this letter
  • A copy of the previous letter should also be attached as reference
  • The subject line of the Payment Letter should give a brief about the content of the letter
  • A Payment Letter should clearly give the details of the payment that is due along with any reference number if there is one
  • The letter should be short and crisp
  • If there are too many points that need to be highlighted in the letter then they should be put at bulleted points
  • Use of simple language is always a good option in a Payment Letter because the letter could also be meant for someone who is not as literate as others
  • There is no scope of any grammatical or punctuation errors
  • The letter should always be addressed to the person or institution who is being reminded about the payment
  • It should always be written by an authorized personnel
  • The letter should have a phone number or an email address for the recipient’s benefit
  • If non payment results in a consequence then that too should be clearly mentioned in the letter
  • Transparency of communication is the strength of this letter
  • If the payment is expected to reach as a result of the letter, it is always better to also enclose a pre-paid self addressed envelope

SAMPLE PAYMENT LETTER

(This is a Payment Letter for a payment due for a club membership)

________________ (Name and address of payee)

________________ (Date)

Subject: Payment due towards your club membership

Dear Sir or Madam

You have a membership with our club vide membership number ___________.

This is to remind you that your payment of Rs._________ towards the renewal of the membership is due on ____________ (due date).

You are requested to make the payment latest by _________ (date) to ensure continuity of membership. The payment can be made either by cheque or demand draft in favor of _______________ (name of club) payable at ____________ (city).

We regret to say that if the payment is not received by the due date your membership will stand cancelled.

We hope to serve you better each time you use our services.

Best regards,

(Name of signing authority)