In businesses, there are two types of money exchange taking place. The raw materials etc. are procured from the supplier on payment and after manufacturing/ refining, the finished product is sold to the clients or customers. Payments made to the suppliers and those received from the clients are often in installments. Sometimes payments get delayed.
There can be miscellaneous reasons for that and to remind the other party to pay the outstanding amount, a request letter is usually written. It is often called an overdue invoice letter or outstanding payment letter.
It is a good way to communicate as opposed to a phone call, as it is easier to maintain a record of the written letters and they help the company to keep track of the communication with the other party.
These are formal letters and they are written on the company letterhead. This lends the contents the required degree of seriousness and professional and authoritative air. Also, in this way the contact information is communicated effortlessly for the client’s ease.
The purpose of writing the letter should be stated in clear and concise words. All the relevant details like the dates when the project was assigned, the date on which the earlier installments were made, the amount paid, the amount still outstanding, the missed due date for the outstanding payment, facts should be mentioned preferably with proof i.e., a copy of relevant documents/receipts should also be attached with the letter. The complete information required to make the transfer should be communicated like the account numbers.
The letter should also outline the suggested payment plan and the other party should be informed about the consequences of non-payment or payment being delayed any further. These can be in the form of a fine imposed in proportion to the delay or in some extreme cases, legal action can also be taken.
The party demanding the payment should clearly communicate that they are open to negotiations on the payment plan, but it has to be completed in a specific time frame. The tone should be firm but non-threatening.
A polite and respectful tone is very important in business dealings. Also in case of non-compliance, these letters would be a part of the record submitted for legal proceedings, so using a threatening tone can be counter-productive for the company.
[Designation] [company name]
Subject: Request letter to release the outstanding payment for [X]
Dear Mr. [name]
I [name], [designation] from [hotel name] am writing to bring to your notice the issue of outstanding payment to us. Your firm [name] had reserved our Poolside Marquee for your annual dinner on [date].
In addition to the charges for the marquee, the payment for the catering and décor of the venue is still pending. In total an outstanding amount of [number] is due. An initial payment of [number] had been made and the remaining amount was to be paid within two days after the event. A week has passed but we still have not received the remaining payment.
This is very unprofessional and we did not expect this slackness from a company of your repute. We have contacted your HR department but did not receive any positive response hence we are writing to formally request the release of the outstanding payment.
Please make the complete payment by [date] or else a fine of [number] would be charged per day. since you are our old patrons, so we have not imposed any fine on payment before [date].
Please look into this issue and resolve it at your earliest. In case of any queries, please contact me on [phone number] or [email address].
Looking forward to your cooperation,