How to Word a Request for Payment for Services Rendered
There are few things as frustrating as not getting paid for work you have done for a client. Not only does it strain your relationship with the client, but it represents lost time and energy on your part, particularly if you're staring at your email trying to phrase a reminder letter.
Provided you have performed the services you promised, there is no reason not to expect prompt payment from a customer. In most cases, a short, friendly and – above all – polite reminder will prompt them to send a check. If that fails, a more formal approach may be required.
The majority of businesses require an invoice before they will pay you money. Simply telling a client in person how much he owes you or writing the figure in the body of an email won't be enough. Like you, clients need to track their expenses, and using an invoice is the primary method of doing this.
There are plenty of ways to quickly draft an invoice. Microsoft Word and Excel both have templates available for invoices. If you use PayPal, you can generate professional invoices very quickly using its invoice service.
There's usually no need to print and mail an invoice. Simply attach it to an email. If you're sending it to a larger company, ask your contact to whom you should forward the invoice. Always cc that contact in the email so the person receiving the invoice knows who contracted your services.
Invoices don't need to be complicated, and a one-line invoice is perfectly acceptable if you have sold only one product or one service. The top of the invoice should include your company's name and address and the client's name and address, the date of the invoice and an invoice number. The invoice number can be anything you want but should be based on a system such as:
- ABC001: Representing the client name and the invoice number.
- 2019001: The year and the invoice number, regardless of the client. A first invoice to a second client would be 2019002, for example.
- 20190601: Representing the first invoice of June 2019, regardless of the client.
The prices of items in the invoice should be placed in columns, including the line item number (beginning with 1), the number of units, a description of the units, price per unit and then a subtotal for those units (number of units multiplied by the price). The costs of each unit should be totaled at the bottom with any discounts and taxes applied to that total, giving you the grand total as the very last number on the invoice.
Finally, the invoice should state when you expect it to be paid, normally within 30 days, with a reminder of any terms in your contract like an interest penalty for late payments.
Often, a quick phone call or a short email is all you need to get a client to pay you for a past-due invoice. How you phrase your request depends on your relationship with the client. It can be a gentle nudge or a more formal request.
Example Email 1:
Re: Invoice 2019092
Hi John,
We haven't received payment for last month's invoice yet. I've attached a copy for your reference.
Example Email 2:
Re: Invoice 2019093
Dear Susan,
We have yet to receive the $600 payment for last month's invoice. Assuming there isn't a problem with our services, when should we expect to receive your check? If there is a problem, please let me know immediately.
If an email or a phone call has yet to get you the money you're owed, a more formal letter is in order. To write a billing letter for services rendered, you can use a standard letter template. The top of the letter should include your company's name and contact information as well as the client's contact information and the date.
Dear John,
Enclosed please find our final invoice for services rendered. I trust that you will find the invoice to be correct in its details. If you have any questions or concerns, however, please contact me. I appreciate the opportunity to work with you on this project. Should you require (type of service you offer) in the future, I hope that you will give me a call.
Sign the letter and include a copy of the invoice.
One way to give clients an incentive to pay on time is to charge them interest for payments that are late. While the law can vary in each state, businesses and contractors not paid for services rendered are generally allowed to charge interest on unpaid invoices provided that the amount is reasonable and provided that you included a clause explaining this in the contract before the sale was made.
Check out the law in your state and, if necessary, consult a lawyer to add a clause to your contract that will allow you to impose a late payment penalty. In California, for example, if you include an interest penalty in your contract, it is legally binding provided that the interest rate is reasonable (up to 18 percent per annum).
Another perhaps more amiable way to get clients to pay on time is to offer them a discount for doing so. Even a discount of 5 percent will prompt a budget-minded client to get that check out immediately.
Ideally, this is something you should specify in the sales contract before the purchase is finalized and then include it in your first invoice.
Offering a discount can often help you close a sale as well as give you a wonderful way to gently remind a client to pay promptly once the job is completed.
You: Out of curiosity, do you normally pay your invoices immediately?
Prospect: Of course.
You: That's great! Provided you pay within 30 days, you'll get a 5 percent discount, which will cut the price by a few hundred dollars.
You: Hi, Steve. I was just looking over my billing last night, and I realized we had sent you an invoice 28 days ago.
Client: That's right.
You: I don't know when you normally cut checks to suppliers, but I thought I should remind you about the 30-day payment discount on the bottom of that invoice. I don't normally like giving money away, but I'd feel bad if I didn't give you a heads up that it's about to expire.
Once a payment is 60 to 90 days past due, you have a choice to make. You can either become a serious businessperson and start playing hardball, or you can try appealing to your client as one human to another. If you take the first approach, you may want to talk to your lawyer about how to phrase a letter to demand payment.
If the client ignores that letter, you will then likely have to take her to small claims court or get a collection agency involved. You can also contact the local Better Business Bureau for recourse through that service.
As a small business owner, a softer approach that may be even more effective is to appeal to your client's conscience. After all, a few unpaid invoices can often be enough to put a small company out of business. A personal appeal can be written as a letter or sent as an email.
This is just a short note to tell you that I'm truly disappointed that you still haven't paid me the $500 you owe me for my work. I understand this isn't a huge sum of money, but it represents more to me than that. I have always tried my best to go above and beyond your requirements and have never failed to make your problems my own. I have always enjoyed working with you, but at the moment, I have to re-evaluate our relationship.
If there is some reason that you haven't paid me, please let me know. Is money tight? Have I offended you in some way? I honestly have no idea what to think right now. If I don't hear back from you in the next few days, I will have to assume you are terminating our business relationship.