How to Follow Up on Unpaid Invoices (Email Templates + Strategy)
Chasing unpaid invoices is uncomfortable but necessary. Learn professional strategies for following up on overdue payments without damaging client relationships. Includes proven email templates, escalation timeline, phone scripts, and legal options.
The Uncomfortable Reality of Unpaid Invoices
If you're running a business—whether freelancing, consulting, or operating a small company—you will face unpaid invoices. It's not a matter of "if" but "when." According to recent studies, over 60% of small businesses struggle with late payments, and the average small business has $84,000 in outstanding receivables at any given time.
💸 The Cost of Unpaid Invoices
Late payments aren't just inconvenient—they're dangerous. One in four business bankruptcies are attributed to late payments and cash flow problems. Every unpaid invoice threatens your ability to pay bills, employees, and suppliers. The longer an invoice remains unpaid, the less likely you are to collect it: invoices unpaid after 90 days have only a 50% chance of collection.
Many business owners avoid following up on unpaid invoices because they:
- • Fear damaging the relationship: Worry about appearing pushy or desperate
- • Feel awkward asking for money: Uncomfortable discussing finances
- • Assume clients will pay eventually: Hope and passivity instead of action
- • Don't know what to say: Lack confidence in their approach
- • Are too busy: Collections fall to the bottom of the to-do list
This guide provides you with a proven system for unpaid invoice follow up—professional strategies, exact email templates, escalation timelines, and legal options that maintain professionalism while protecting your cash flow.
Prevention: Your First Line of Defense
Before we dive into follow-up strategies, understand that prevention is far better than collection. The best time to ensure payment is before work begins:
Prevention Strategies That Work:
✅ Before Work Starts:
- • Clear written payment terms
- • Require 30-50% deposit upfront
- • Check credit references for large projects
- • Written contract or agreement
- • Document scope to prevent disputes
✅ During Invoicing:
- • Send invoices immediately
- • Professional, branded template
- • Crystal-clear due date
- • Multiple payment methods
- • Payment links included
⚠️ Red Flags to Watch
Some clients signal payment problems early. Watch for:
- • Reluctance to agree to payment terms
- • Requesting unusually long payment periods
- • History of disputes with other vendors
- • Vague about budget or payment authority
- • Constant scope changes without payment discussion
The Professional Follow-Up Timeline
Professional collection requires a systematic approach with escalating communication. Here's the proven timeline that maintains relationships while ensuring payment:
The 7-14-21-30 Day Follow-Up System
Invoice Sent
Professional invoice sent immediately after work completion. Clear due date, payment methods, and terms included.
Friendly Check-In
Tone: Casual, helpful, assuming good faith
Goal: Gentle reminder that invoice exists, offer to help with any questions
Professional Reminder
Tone: Professional, direct, businesslike
Goal: Clear reminder of due date, request payment by specific date
Firm Notice
Tone: Firm, serious, consequence-focused
Goal: State invoice is overdue, mention late fees, request immediate payment
Final Notice + Phone Call
Tone: Very firm, final warning
Goal: Final opportunity before escalation to collections or legal action
Escalation
Options: Collections agency, small claims court, lawyer
Goal: Legal recovery of funds
Email Template #1: Day 7 - Friendly Check-In
This first follow-up is gentle and assumes the best. The client may have simply overlooked the invoice or had it buried in email. Keep it light and helpful:
Subject: Quick follow-up on Invoice #[NUMBER]
Hi [Client Name],
I hope this email finds you well! I wanted to quickly follow up on Invoice #[NUMBER] that I sent on [DATE] for [PROJECT/SERVICE].
The invoice amount is $[AMOUNT] and payment is due on [DUE DATE].
If you need me to resend the invoice or have any questions about the charges, please don't hesitate to let me know. I'm happy to clarify anything!
I've also included the invoice as an attachment for your convenience.
Thanks so much!
Best regards,
[Your Name]
[Your Company]
[Your Contact Info]
Why This Works:
- ✓ Friendly tone: Maintains positive relationship
- ✓ Assumes good faith: No accusatory language
- ✓ Offers help: Shows you're a partner, not adversary
- ✓ Includes details: Invoice number, amount, due date clear
- ✓ Reattaches invoice: Makes it easy for them to pay
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Email Template #2: Day 14 - Professional Reminder
Two weeks in, it's time to be more direct while still maintaining professionalism. This email makes it clear payment is expected:
Subject: Payment Reminder - Invoice #[NUMBER] Due [DATE]
Dear [Client Name],
I'm writing to remind you that Invoice #[NUMBER] for $[AMOUNT] is due on [DUE DATE].
This invoice covers [BRIEF DESCRIPTION OF WORK] completed on [DATE].
Invoice Details:
• Invoice Number: #[NUMBER]
• Amount Due: $[AMOUNT]
• Due Date: [DUE DATE]
• Project: [PROJECT NAME]
Payment Options:
• Bank Transfer: [DETAILS]
• PayPal: [LINK]
• Credit Card: [LINK]
Please submit payment by [DUE DATE] to avoid any late fees as outlined in our agreement.
If payment has already been sent, please disregard this reminder and accept my thanks. If you have any questions or concerns about this invoice, please contact me immediately so we can resolve them.
I've attached the invoice again for your records.
Thank you for your prompt attention to this matter.
Best regards,
[Your Name]
[Your Company]
[Your Phone]
[Your Email]
Why This Works:
- ✓ Professional tone: Businesslike but not aggressive
- ✓ Complete information: All payment details included
- ✓ Multiple payment methods: Removes barriers to payment
- ✓ Mentions late fees: Introduces consequence without threat
- ✓ Grace for payment in transit: Acknowledges they may have paid
- ✓ Opens dialogue: Invites communication about issues
Email Template #3: Day 21 - Firm Notice
At three weeks, the invoice is officially overdue. This email is firm and introduces real consequences:
Subject: OVERDUE INVOICE - Immediate Payment Required #[NUMBER]
Dear [Client Name],
This is a formal notice that Invoice #[NUMBER] for $[AMOUNT] is now [X] days overdue.
Invoice Details:
• Invoice Number: #[NUMBER]
• Amount Due: $[AMOUNT]
• Original Due Date: [DUE DATE]
• Days Overdue: [X] days
According to our agreement, late payments are subject to a [1.5%] monthly interest charge. As of today, your account balance is $[AMOUNT + LATE FEES].
This invoice requires immediate payment.
If there is a legitimate reason for the delay or if you are experiencing difficulty with payment, please contact me immediately at [PHONE] or reply to this email so we can discuss a payment arrangement.
If I do not receive payment or hear from you within 48 hours, I will have no choice but to take further action, which may include:
• Suspending all current and future services
• Reporting this account to credit agencies
• Engaging a collections agency
• Pursuing legal action to recover the debt
I value our business relationship and would prefer to resolve this matter directly. Please remit payment immediately or contact me to discuss this matter.
Payment Options:
• Bank Transfer: [DETAILS]
• PayPal: [LINK]
• Credit Card: [LINK]
Regards,
[Your Name]
[Your Company]
[Your Phone]
[Your Email]
Why This Works:
- ✓ Firm and direct: No ambiguity about seriousness
- ✓ States consequences: Clear escalation path outlined
- ✓ Includes late fees: Applies financial pressure
- ✓ 48-hour deadline: Creates urgency
- ✓ Still offers dialogue: Leaves door open for resolution
- ✓ Documents the situation: Creates paper trail for legal action
Email Template #4: Day 30 - Final Notice
This is your last communication before escalating to collections or legal action. It must be formal and unambiguous:
Subject: FINAL NOTICE - Invoice #[NUMBER] - Action Required
Dear [Client Name],
This is your final notice regarding Invoice #[NUMBER].
Despite multiple attempts to contact you regarding this overdue invoice, payment has not been received.
Invoice Details:
• Invoice Number: #[NUMBER]
• Original Amount: $[AMOUNT]
• Late Fees: $[LATE FEES]
• Total Amount Due: $[TOTAL]
• Original Due Date: [DUE DATE]
• Days Overdue: [X] days
Previous Contact Attempts:
• [DATE]: Initial invoice sent
• [DATE]: First reminder email
• [DATE]: Second reminder email
• [DATE]: Overdue notice email
You have 72 hours from receipt of this email to remit payment in full. If payment is not received by [SPECIFIC DATE AND TIME], this account will be:
1. Turned over to a collections agency
2. Reported to credit bureaus
3. Subject to legal proceedings in [JURISDICTION]
Please note that if this account is sent to collections, you will be responsible for all collection costs and legal fees in addition to the invoice amount, as stated in our original agreement.
To avoid these actions, remit payment immediately:
Payment Options:
• Bank Transfer: [DETAILS]
• PayPal: [LINK]
• Credit Card: [LINK]
• Payment by phone: [PHONE]
If you have already sent payment, please provide proof of payment immediately.
This is my final attempt to resolve this matter directly before pursuing legal remedies.
Sincerely,
[Your Name]
[Your Title]
[Your Company]
[Your Phone]
[Your Email]
CC: [Your accountant/lawyer if applicable]
Why This Works:
- ✓ Formal and serious: Legal tone establishes gravity
- ✓ Documents all attempts: Shows good faith effort to collect
- ✓ Specific deadline: 72 hours creates real urgency
- ✓ Clear consequences: Exactly what will happen if unpaid
- ✓ Mentions additional costs: Collection fees and legal costs
- ✓ CC notation: Shows others are involved (even if not actually CC'd)
The Phone Call Strategy
Sometimes email isn't enough. A phone call can be more effective, especially at the 21-30 day mark. Here's how to handle collection calls professionally:
Before the Call:
- ✓ Have all invoice details in front of you
- ✓ Know your payment terms and late fee policy
- ✓ Be clear on what outcome you want
- ✓ Choose a quiet time when you're calm
- ✓ Call during business hours (10am-4pm)
Phone Script Template:
Professional Collection Call Script:
Opening:
"Hi [Name], this is [Your Name] from [Company]. Do you have a few minutes to discuss Invoice #[NUMBER]?"
If they say yes:
"Thank you. I'm calling about Invoice #[NUMBER] for $[AMOUNT] which was due on [DATE]. The invoice is now [X] days overdue, and I wanted to check in with you about payment."
Listen to their response, then:
"I understand. What can we do to get this invoice paid? Can I expect payment by [SPECIFIC DATE]?"
If they commit to a date:
"Great, I appreciate that. I'll send you a confirmation email with the payment details. Can I call you on [DATE] if payment hasn't been received?"
If they can't pay in full:
"I understand that might be difficult. Would you be able to make a partial payment of $[AMOUNT] by [DATE], with the remainder on [DATE]?"
If they dispute the invoice:
"I see. Let's discuss your concerns right now so we can resolve this. What specifically are you questioning?"
Closing:
"To summarize, you'll be sending $[AMOUNT] by [DATE]. I'll send you an email confirming our conversation. Thanks for taking the time to speak with me."
Phone Call Do's and Don'ts:
✅ Do:
- • Be professional and calm
- • Have all facts ready
- • Listen to their concerns
- • Offer payment plans if needed
- • Confirm commitments in writing
- • Take detailed notes
- • Follow up immediately with email
❌ Don't:
- • Get emotional or angry
- • Make threats you won't follow through on
- • Accept vague promises ("soon," "next week")
- • Apologize for calling
- • Discuss anything except the invoice
- • Call outside business hours
- • Use abusive or harassing language
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Handling Common Excuses
Clients offer various excuses for late payment. Here's how to respond professionally to the most common ones:
💬 "I never received the invoice"
Your Response:
"No problem! I'm resending it right now to [EMAIL]. Can you confirm you've received it and let me know when I can expect payment? I'll also send you a text/call to make sure you got it."
💬 "I'm waiting for payment from my client first"
Your Response:
"I understand cash flow can be tight. However, our agreement is independent of your client relationships. I need payment by [DATE]. If that's challenging, I can offer a payment plan—would [AMOUNT] on [DATE] and [AMOUNT] on [DATE] work?"
💬 "The work wasn't satisfactory"
Your Response:
"I'm sorry to hear that. You didn't mention any concerns when I delivered the work. What specifically wasn't satisfactory? Let's discuss this immediately. However, please note that per our contract, disputes must be raised within [X] days of delivery."
💬 "Our payment process takes 60-90 days"
Your Response:
"I appreciate that information. However, our agreed payment terms are [X] days, which you accepted when we began work. If your payment process requires longer, we'll need to discuss that before any future projects. For this invoice, payment is due per our original agreement."
💬 "I'll pay you next month"
Your Response:
"I need a specific date, not 'next month.' Can you commit to payment by [SPECIFIC DATE]? I'll mark that in my calendar and follow up with you on [DATE] if payment hasn't been received. Can I have your verbal commitment to that date?"
💬 "We're having cash flow problems"
Your Response:
"I understand—I'm a small business too. Let's work out a payment plan. Can you pay $[AMOUNT] this week, then $[AMOUNT] in two weeks? I need some payment immediately to show good faith."
When to Offer a Payment Plan
Sometimes clients genuinely can't pay the full amount immediately. A payment plan can be better than no payment at all—but set it up properly:
Payment Plan Best Practices:
- Get something upfront: Minimum 25-30% immediately shows good faith
- Short timeframe: No more than 2-3 installments over 4-6 weeks
- Written agreement: Email confirmation with specific dates and amounts
- Automatic payments: Set up recurring payments if possible
- Suspend services: No additional work until plan is complete
- Include late fees: Don't waive penalties you've already applied
- Break the plan = collections: One missed payment triggers escalation
Payment Plan Email Template:
Subject: Payment Plan Agreement - Invoice #[NUMBER]
Dear [Client Name],
Thank you for our conversation today regarding Invoice #[NUMBER]. As discussed, we've agreed to the following payment plan:
Total Amount Due: $[TOTAL]
Payment Schedule:
• Payment 1: $[AMOUNT] - Due [DATE]
• Payment 2: $[AMOUNT] - Due [DATE]
• Payment 3: $[AMOUNT] - Due [DATE]
Terms:
• All payments must be received by 5pm on the due date
• Missing any payment will result in the full balance becoming immediately due
• Late fees of [X%] per month remain in effect
• No additional services will be provided until this balance is paid in full
• If any payment is missed, this account will be sent to collections without further notice
Please reply to this email with "I agree to these terms" to confirm this arrangement.
I've set up reminders for these dates and will send you payment links 2 days before each due date.
Thank you for working with me on this.
Best regards,
[Your Name]
Legal Options for Unpaid Invoices
If all collection attempts fail, you have legal remedies. Understanding these options helps you decide the best course of action:
Option 1: Collections Agency
📞 How Collections Agencies Work:
Process: You hire an agency to collect on your behalf. They contact the debtor using more aggressive tactics.
Cost: Typically 25-50% of collected amount (contingency basis)
Pros:
- • No upfront cost
- • They handle all communication
- • Professional, experienced collectors
- • Damages client's credit if unpaid
Cons:
- • You only get 50-75% of invoice amount
- • Relationship with client is permanently damaged
- • No guarantee of collection
- • Small invoices may be rejected by agencies
When to use: Invoices $500+, client is non-responsive, you've exhausted all options
Option 2: Small Claims Court
⚖️ Small Claims Court Process:
Process: You file a lawsuit in small claims court without a lawyer.
Cost: Filing fees $30-100, plus service of process fees
Limits: Varies by state, typically $5,000-$10,000 maximum
Steps:
- 1. File claim at your local courthouse
- 2. Serve defendant with court papers
- 3. Appear at court hearing with evidence
- 4. Judge rules, often same day
- 5. If you win, collect judgment (may require additional steps)
Pros:
- • Relatively quick (2-3 months)
- • No lawyer needed
- • Low filing costs
- • You keep full invoice amount if you win
Cons:
- • Your time required (court appearance, paperwork)
- • Must enforce judgment yourself (garnishment, liens)
- • Client may not have assets to collect
- • Not worth it for small amounts
When to use: Invoice over $1,000, you have clear documentation, client has assets
Option 3: Lawyer/Legal Action
👨⚖️ Attorney-Represented Collection:
Process: Hire an attorney to send demand letters or file lawsuit.
Cost: $200-500 for demand letter, $2,000-5,000+ for lawsuit
Pros:
- • Lawyer's letter often prompts immediate payment
- • Professional handling of complex cases
- • Can recover attorney fees if contract specifies
- • Necessary for large amounts or disputes
Cons:
- • Expensive upfront costs
- • May cost more than invoice amount
- • Lengthy process (6+ months)
When to use: Invoices $5,000+, complex legal issues, need judgment enforcement
Decision Matrix: Which Option to Choose?
| Invoice Amount | Best Option | Why |
|---|---|---|
| Under $500 | Write off or final attempt | Legal action costs more than invoice |
| $500-$2,000 | Collections agency | Worthwhile for agency, too small for court |
| $2,000-$5,000 | Small claims court | Worth your time, within limits, keep full amount |
| $5,000+ | Attorney | Large enough to justify legal costs |
When to Write Off Bad Debt
Sometimes the smartest business decision is to walk away. Not every unpaid invoice is worth pursuing:
Consider Writing Off When:
- • Invoice is under $500 and client is completely non-responsive
- • Cost of collection would exceed invoice amount
- • Client has declared bankruptcy or gone out of business
- • You've spent more than 10 hours on collection attempts
- • Client is in another country with no legal recourse
- • More than 12 months have passed
- • Pursuing it is damaging your mental health or business focus
💡 Tax Deduction
Bad debt can often be written off as a tax deduction. Consult with your accountant about properly documenting bad debt write-offs for tax purposes. You'll need to show that you made reasonable collection efforts before writing it off.
Preventing Future Unpaid Invoices
After dealing with unpaid invoices, improve your systems to prevent future problems:
✅ Before Each Project:
- • Written contract with payment terms
- • Credit check for large projects
- • 30-50% deposit required
- • Clear scope to prevent disputes
- • Late payment policy established
- • Check references for new clients
✅ During Each Project:
- • Invoice immediately upon completion
- • Use professional invoice software
- • Offer multiple payment methods
- • Set up automatic reminders
- • Keep detailed records
- • Track payment history by client
Client Payment Rating System:
Create a simple rating system for clients based on payment history:
Standard terms, no deposit required for repeat projects
Shorter payment terms, 30% deposit, monitor closely
50% deposit, prepayment for future work, or decline projects
Key Takeaways
🎯 Summary: Professional Collections Strategy
1. Prevention is best: Clear terms, deposits, professional invoicing
2. Follow systematic timeline: Day 7, 14, 21, 30 with escalating firmness
3. Use professional communication: Templates maintain consistency and tone
4. Document everything: Create paper trail for potential legal action
5. Don't take it personally: This is business, stay professional
6. Automate reminders: Software ensures consistent follow-up
7. Know when to escalate: Collections, court, or write-off
8. Learn from it: Improve systems to prevent future problems
Conclusion: Professional Collections Protects Your Business
Following up on unpaid invoice follow up is never fun, but it's essential for business survival. With this systematic approach—professional communication, escalating timeline, clear documentation, and knowledge of legal options—you can collect what you're owed while maintaining professionalism.
Remember these key principles:
- ✓ Be professional always: Never get emotional or aggressive
- ✓ Document everything: Every email, call, promise documented
- ✓ Escalate systematically: Follow the proven timeline
- ✓ Use templates: Consistent, professional communication
- ✓ Automate when possible: Software handles tracking and reminders
- ✓ Know your options: Collections, court, or write-off
- ✓ Learn and prevent: Improve systems for future projects
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