Prompt payment is essential for the financial health and stability of Australian small businesses.

Asking for payment can sometimes be uncomfortable but mastering the art of requesting payment through email can significantly improve your collection efforts.

To help you, we’ve put together a bit of a guide, tailored specifically for Australian small business owners, providing insights, strategies, and a sample email template to help you craft effective payment request emails.

Keep reading to learn more.

Understanding the Impact of Late Payments on Businesses

Late payments can have detrimental effects on any business – especially small businesses. The consequences can be extremely frustrating, some of which are:

• Cash Flow Challenges: Delayed or non-payment can cause financial strain, affecting day-to-day operations and hindering growth opportunities.
• Relationship Strain: Late payments strain business relationships, eroding trust and potentially resulting in the loss of future business prospects.
• Additional Costs: Late payment penalties and interest charges can accumulate, adding to the financial burden.

Before Making a Payment Request

Before you send off request emails and start making phone calls, it’s a good idea to understand your debtor’s situation. This can help to know the best way to approach a payment request and give you a better chance of receiving that payment.

Here’s some things you can do help this part of the process:

• Analyse the debtor’s payment history, financial capabilities, and any relevant cultural factors that may influence payment behaviour.
• Review outstanding debt details, including the amount owed, due dates, and supporting documentation, ensuring clarity and accuracy.
• Assess communication history to address any concerns or disputes raised by the debtor promptly.

While some of these steps may take time they can improve your chances of receiving a payment in the future.

How to Craft a Payment Request Email

When composing your payment request email, consider the following key elements:

Subject Line:

Use a concise and attention-grabbing subject line that clearly states the purpose of the email, e.g., “Urgent Payment Request: Invoice #123456 – Due Date Reminder.”

Greeting:

Begin the email with a polite and professional greeting, addressing the debtor by name if possible.

Introduction:

Recap the business relationship, acknowledging past interactions and expressing appreciation for their support.

Reinforce the importance of timely payments for maintaining a healthy business operation.

Outstanding Amount and Due Date:

Clearly state the outstanding amount owed and the specific due date to eliminate any confusion or ambiguity.

Payment Instructions:

Provide clear and concise instructions on how the debtor can make payment, including preferred payment methods commonly used in Australia (e.g., bank transfer, credit card, online payment platforms).

Mention any specific details or reference numbers required for successful payment processing.

Address Concerns or Disputes:

Acknowledge any concerns or disputes raised by the debtor in previous communications.

Offer assistance and provide contact information for addressing queries or resolving outstanding issues.

Closing:

Express appreciation for their attention and cooperation.

Emphasise the benefits of prompt payment, such as maintaining a strong business relationship and avoiding additional costs.

Provide your contact information for any further assistance or clarification.

While some of these things may seem obvious, it can be easy to not know where to begin in these situations, especially when you’re feeling frustrated or flustered. Often a simple approach is the most effective.

Payment Request Email Sample Template

Subject: Urgent Payment Request: Invoice #123456 – Due Date Reminder

[Your Company Logo/Header] [Your Company Name] [Your Contact Information]

Dear [Debtor’s Name],

I hope this email finds you well. We sincerely appreciate your business and the support you have shown to [Your Company Name].

As a valued client, we wanted to bring your attention to the payment of Invoice #123456, which is due on [Due Date]. Your prompt payment is crucial to ensuring the smooth operation of our business and delivering quality services to our clients.

Outstanding Amount: $[Amount Owed] Due Date: [Due Date]

To facilitate the payment process, we offer the following convenient payment options:

Bank Transfer:

Account Name: [Your Company Name]

BSB: [BSB Number]

Account Number: [Account Number]

Credit Card:

Visit our secure online payment portal at [Payment Portal URL] and follow the instructions to submit your payment using your credit card details.

If you have any questions, concerns, or require assistance with the payment process, please do not hesitate to contact our friendly team at [Your Contact Information]. We are committed to resolving any issues promptly and ensuring a seamless payment experience for you.

We sincerely thank you for your attention to this matter and your cooperation in making timely payment. Your support enables us to continue delivering high-quality products/services and maintaining a strong business relationship.

Best regards,

[Your Name] [Your Position] [Your Company Name] [Your Contact Information]

Following Up on Payment Requests

To maintain momentum and encourage prompt payment:

• Establish a follow-up schedule to send polite reminders as the due date approaches.
• Gradually escalate the urgency of subsequent emails while maintaining professionalism.
• Consider alternative communication channels, such as phone calls or formal letters, if necessary, to address payment concerns directly.

Keep in mind that some of the above steps may not be necessary especially if the payment has been promptly made after your first communication.

Working with a Debt Collector to Chase Down Outstanding Debts

If your efforts to collect overdue payments have been unsuccessful, working with a professional debt collector may be a good option for you. Before you dive into hiring one, here are some of the factors to take into consideration.

Assessing the Need for a Debt Collector:

• Evaluate the age and amount of the outstanding debt to determine if it is appropriate to engage a debt collector. If it’s only one small debt, it make not be worth engaging a debt collector for.
• Recognise the advantages of involving a debt collector, such as their expertise in debt recovery and legal compliance. Will this help you save time? Have you already exhausted all of your efforts?

Choosing the Right Debt Collection Agency:

• Look for agencies with experience in your industry and a proven track record of successfully recovering debts.
• Ensure the agency complies with all relevant legal and ethical standards.

Providing Accurate Documentation:

• Gather and organize all relevant documentation, including invoices, contracts, and communication records, to provide to the debt collection agency.
• Maintain a clear record of all attempts made to contact the debtor and the responses received.

Collaborating with the Debt Collector:

• Share any additional information or insights you have about the debtor’s situation, payment history, or potential challenges.
• Respond promptly to any requests for documentation or assistance from the debt collector.

Collect Your Debts with Communication

Communicating effectively with your customers and clients can go a long way in debt collection. Establish open communication to avoid issues. But if you do run into problems, you’re not alone. Here at JMA Credit Control, we can help you collect your debts effectively and efficiently. We specialise in working with small and medium sized businesses throughout Australia and over the years we’ve successfully collected debts for a wide range of businesses.

See how we can help you today. Give us a call on 1300 664 223 or get in touch with us here.