The Invoice Is Overdue And Nothing's Happening
Payment was due last week. Maybe two weeks ago.
The accounting software sent the automated reminder. Maybe two. Maybe three.
Still nothing.
Now what?
Most accounting systems handle the polite reminders automatically. Xero, MYOB, QuickBooks - they all send messages at 7, 14, 21, and 30 days overdue.
But automated reminders only work on clients who were planning to pay anyway.
For everyone else, you need something different.
Here's what to send when the automated reminders fail.
If You're Not Using Accounting Software
Some businesses still do this manually. That's fine.
The timing works the same way: 7, 14, 21, and 30 days after the due date.
Set calendar reminders. Send the messages. Track responses in a spreadsheet.
The templates below work whether your system is automated or manual.
The Five-Stage Escalation
Professional debt recovery uses escalation. Each message gets progressively firmer. Each one gives the client another chance to respond.
Here are the five stages, in order. Allow about 7 days between each one.
The Polite Reminder
7 Days Overdue
This is usually automated. Most accounting software handles this.
If you're doing it manually, here's what to send.
Neutral. Professional. Assumes the best. Most legitimate oversights get resolved here.
The Formal Follow-Up
14 Days Overdue
This is often automated too. Check your accounting software settings.
If the automated reminder hasn't worked, this message goes firmer.
States the problem. Sets a clear timeframe. Opens the door for genuine issues. The "Accounts Receivable" signature keeps it professional, not personal.
The Firm Notice
21 Days Overdue
Automated reminders have failed. Two manual messages sent. No response.
Time to make the consequences clear.
Direct. Clear deadline. Specific consequence. Offers a payment plan option (reasonable) but makes escalation explicit. Clients showing patterns from the 5 Signs Your Clients Are Taking Advantage article often respond at this stage. The word "escalation" signals boundaries.
The Final Demand
28 Days Overdue
Three messages sent. Four weeks overdue. Multiple opportunities to respond.
This is the last communication before action.
No negotiation. Clear deadline. Explicit consequences. The "Credit Control" signature signals this has moved beyond accounts receivable. Reality check: At this stage, decide whether this debt is worth pursuing. The guide on when to write off bad debt covers that decision framework.
The Referral Notice
30+ Days Overdue
Payment deadline passed. No response. Decision made to pursue recovery.
This message is notification, not negotiation.
Factual. Brief. Professional. The matter is closed from your end. Critical: Only send this after actually referring the debt. Empty threats destroy credibility.
Automated vs Manual: What You Need To Know
If your accounting software handles reminders:
- Stages 1 and 2 are usually automated
- Check your settings to confirm timing and wording
- You take over manually at Stage 3 when automation fails
If you're doing this manually:
- Set calendar reminders for 7, 14, 21, and 28 days after due date
- Use the templates above
- Track all communication in a spreadsheet or CRM
Either way, the principle is the same: systematic escalation with increasing firmness.
When Clients Respond With Excuses
Common responses and how to handle them professionally.
Vague promises get documented, not accepted.
For identifying genuine issues versus avoidance tactics, see the 5 Signs Your Clients Are Taking Advantage guide.
The Professional Distance Rule
Notice the templates avoid "I" and "you" language where possible.
Not: "I sent you three reminders"
Instead: "Multiple reminders have been sent"
Not: "You need to pay me"
Instead: "Payment is required"
Not: "I can't continue to be ignored"
Instead: "This matter requires immediate attention"
This isn't about being cold. It's about staying in control.
Debt recovery is a business process, not a personal relationship. The language should reflect that.
SMS vs Email: When To Use Which
Use email for:
- Debts over $2,000
- Creating a documented paper trail
- Corporate or business clients
- Attaching copies of original invoices
Use SMS for:
- Debts under $2,000
- Sole traders and small operators
- When emails are being ignored
- Time-sensitive final demands
Use both for:
- Stage 3 and beyond
- Complete communication silence
- Maximum visibility
SMS has higher open rates than email. Use it strategically.
What Most Businesses Get Wrong
=> MISTAKE 1: Sending one polite reminder then immediately escalating to debt collectors.
Expensive. Relationship-destroying. Usually unnecessary.
=> MISTAKE 2: Sending endless polite reminders without ever escalating.
Teaches clients that payment terms are optional. Normalises late payment.
=> The correct approach: Systematic escalation with clear stages and increasing firmness.
Most debts resolve at Stage 2 or 3 when the process is consistent. The ones that don't? Those need professional intervention.
Or Hand The Entire Process Over
Here's what handling this internally looks like:
Stage 1: Automated or manual reminder sent. Wait 7 days.
Stage 2: Follow-up sent. Track response. Wait 7 days.
Stage 3: Firm notice sent. Handle excuses. Wait 7 days.
Stage 4: Final demand sent. Document everything. Wait 3 days.
Stage 5: Decide whether to refer or write off. If referring, find recovery service, negotiate fees, transfer information, monitor progress.
That's 4-5 weeks of tracking, following up, documenting, and managing.
Alternative: Refer the debt after Stage 2 fails. The entire escalation process runs automatically. Responses get handled professionally. Most clients pay before Stage 4. The few that don't go to formal recovery without further involvement.
Get The Templates
Get the tried-and-tested templates. Update your accounting reminders or send them directly to clients.
Send Me The TemplatesThen focus on running the business instead of managing debt collection.
Final Word
Chasing overdue payments is a business process, not a personal conflict.
These templates provide the exact structure for professional escalation. Clear stages. Increasing firmness. Documented trail.
Use them internally if that makes sense for your operation.
Or refer the debt and let professionals handle the chase while you focus on clients who pay on time.
Either way, automated reminders only work on clients who were planning to pay anyway.
For everyone else, you need escalation.