A demand for payment letter is written to a client who defaults on a considerable amount or time period or both. It is written by the service provider to the client stating the amount outstanding and also the time from which it is pending. This letter need not be rude. It needs to be polite yet strong. A demand for payment letter is considered as the first step in the proceedings to close the issue of default. A demand for payment letter not only helps in recovering defaults but also helps in building the company’s image. It needs to clearly reference to the particular outstanding amount and time.
Although the possibility of a genuine problem from the client side is anticipated and understood, there should be a timeline fixed and prior agreed upon by both the parties. A demand letter also serves as a record of attempts made to recover the outstanding amount. It, therefore, needs to clearly convey the outstanding amount as well as the time since when the default has been happening. Also, the timelines allowed to pay needs to be clearly mentioned so as to avoid further defaulting.
Table of Contents
Demand for Payment Letter Writing Tips
- Keep the language formal.
- Get straight to the point.
- The details need to be communicated clearly.
- The letter should have a clear reference to the outstanding amount.
- Thank the receiver at the end of the letter for his/her cooperation.
Demand for Payment Letter Template
Use our free Demand for Payment Letter to help you get started. If you need additional help or more examples check out some of the sample letters below.
From,
__________ (Name of the sender),
__________
__________
__________ (Address)
Date: _____ (Date on Which Letter is Written)
To,
__________ (Name of the receiver),
__________
__________
__________ (Address)
Subject: Demand for Payment Letter
Dear Mr. /Mrs. /Ms. _____ (Name of the person),
This is in reference to your payment due for __________ (product/ service), that you had purchased on __________ (date of purchase), from our company __________ (Name of the company). The last date of payment was __________ (Last date of payment).
Understanding that you might have missed out to make the payment due to genuine reasons and hence writing this letter to bring to your notice the default in payment. We request you to kindly make the payment by __________ (Last date of payment). For your reference, the amount outstanding is __________.
Thank you for your cooperation.
Yours Sincerely,
__________ (Name of the sender)
Sample Letter
From,
Mr Ratnakant G,
Associate Manager,
Recovery department,
GL Furnitures,
Pant Nagar,
Delhi-587738.
17.2.17.
To,
Ms. Shrenu Rao,
Lakshmi Villa,
Pant Nagar.
Delhi-587738.
Subject: Demand for Payment Letter
Dear Ms Shrenu,
This is in reference to your payment due for the furniture that you had purchased on 12.2.2017 from our company, GL Furnitures. The last date of payment was 15.2.2017.
Understanding that you might have missed out to make the payment due to genuine reasons and hence writing this letter to bring to your notice the default in payment. We request you to kindly make the payment by 18.2.2017. For your reference, the amount outstanding is INR27, 999.
Kindly do mention the bill number that was written on your bill in the comments while transferring the money our account number. Our account number and contact details are also mentioned on the bill clearly. In case you face any issues, you can reach out to our representatives anytime. Their numbers are mentioned on the bill as well for your convenience.
Thank you for your cooperation.
Yours Sincerely,
Ratnakant G.
Email Format
The following is a sample letter for a Demand for Payment Letter in email format.
To: name@email.com
From: name@email.com
Subject: Demand for Payment Letter
Dear Mr. /Mrs. /Ms. _____ (Name of the person),
This is in reference to your payment due for __________ (product/ service), that you had purchased on __________ (date of purchase), from our company __________ (Name of the company). The last date of payment was __________ (Last date of payment).
Understanding that you might have missed out to make the payment due to genuine reasons and hence writing this letter to bring to your notice the default in payment. We request you to kindly make the payment by __________ (Last date of payment). For your reference, the amount outstanding is __________.
Thank you for your cooperation.
Best Regards,
__________ (Name of the sender)