Free Demand Letter for Payment: Sample and Template

A demand letter for payment is a formal document written with the intent of collecting a debt. Businesses frequently use demand letters for payment when a customer or client does not pay on time. This letter reminds the debtor of the amount owed and sets a payment deadline.

In this article, we discuss the difference between an invoice and a demand letter for payment. We also provide a checklist of what to include in your demand letter. You will find a format for a demand letter for payment and a sample letter below.

Demand Letter for Payment: By Type (5)

Invoice Vs. Demand Letter for Payment

Your accounts receivable department uses several specialized documents to manage customer and client accounts. Demand letters and invoices are two of these documents. Below are the primary qualities of invoices and demand letters for payment.

  • Invoice: An invoice is a professional document that details a customer’s debt and requests payment. Invoices usually have a detailed line for each item purchased. The total due is found at the end of the document. Invoices inform the customer of their purchases, the amount owed, and the due date.
  • Demand letter for payment: A demand letter for payment is a professional document that contains the total amount due and the payment deadline. This letter reminds the customer that they did not pay an invoice by the due date. Demand letters inform the customer of the amount owed and the consequence of not paying the past-due balance by the payment deadline.

What to Include in Your Demand Letter for Payment

  • Date
  • Amount due
  • Debt information (invoice number or contract number) This information is evidence of the debt. Attach a copy to your letter.
  • Any prior attempts to collect the debt (phone calls, emails, etc.)
  • Payment deadline
  • Consequences of non-payment (legal action, collection agency, etc.)
  • Payment options

Demand letters may include several options for payment. For example, the customer may have the option of paying the total amount due or making installment payments.

Note: In some situations, the writer may offer a discounted amount or a settlement offer to settle the debt. In this case, the writer should mention if the discount (settlement offer) is only valid until a specific time.

Send your demand letter via certified mail with a return receipt requested. Also, be sure to keep a copy of your letter and evidence of the debt. These documents provide valuable evidence of your attempt to collect if you must take legal action to recover the debt.

Format – Demand Letter for Payment

{recipient name}

{recipient address}

{date}

THIS IS AN ATTEMPT TO COLLECT A DEBT

TOTAL AMOUNT DUE: {amount}

Dear {recipient name}:

You currently have an outstanding balance of {amount} with {your company name). I have enclosed a copy of {invoice number, statement number, etc.} for your review. {If you have made a prior attempt to collect this debt, note that attempt here.}

Please select one of the following payment options to resolve this matter:

Discounted Amount: {amount} to be paid by {date}.

Installment Payment Amount:

{amount} paid weekly

{amount} paid monthly

This demand for payment letter serves as formal notice to you and may be used in court as evidence of your failure to pay. You may be liable for attorney fees and court costs if legal recourse is required. Your credit may be affected if we turn this debt over to our collection agency or file a lawsuit. You can protect your credit history by choosing one of the options above to resolve this debt.

If you have any questions about the amount due, please contact me immediately at {your phone number) or {your email address}. We hope to resolve this matter quickly.

Sincerely,

{your signature}

{your name}

Sample Demand Letter for Payment

Jennifer Lowen

320 Mill Street

Denver, AL 59446

June 10, 2036

THIS IS AN ATTEMPT TO COLLECT A DEBT

TOTAL AMOUNT DUE: $698.30

Dear Ms. Lowen,

You currently have an outstanding balance of $698.30 with Maple Leaf Catering. I have enclosed a copy of invoice number 29668 for your review. When I spoke to you on May 20, 2030, you stated the invoice would be paid that week. However, we still have not received your payment.

I am authorized to offer you a discounted total amount of $600.00 if you pay this amount by June 28, 2030.

This demand letter for payment serves as official notice to you. It may be presented in court as evidence of your failure to pay. If we are required to take legal action on this debt, you may be responsible for paying attorney fees and court costs. Any further action we take may negatively affect your credit history.

If you disagree with the invoice or have any questions, please call me at (256) 229-4665 right away. I hope we can resolve this matter quickly.

Sincerely,

Eleanor Smith

Eleanor Smith

Enclosures

Demand Letter for Payment (Word Template)

Demand Letter for Payment

Key Points:

  • Remind the debtor of the debt
  • Enclose invoice or statement copies as proof of the debt
  • Set a payment deadline
  • Offer several payment options when possible
  • Provide the consequence of non-payment

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