What Communication Method Works Best for Late Payments? Text, Phone Call, or Email?

Written by
Spread the love

Debt collectors have various stages in the processing of recovering late payments. Some of the methods and techniques they use involve multiple communication channels, depending on the stage. Some of these stages include different types of communications such as:

  • Friendly payment reminders
  • Overdue payment reminders
  • Final notice
  • Direct contact
  • Formal letter of demand

Let’s take a look at each of these debt recovery phases and decide what type of communication works best in each scenario.

Friendly payment reminders

First of all, when payments are overdue, the companies need to communicate with their customers either via phone, email, or even the traditional mail with a courtesy reminder.

There might be several reasons why the customer didn’t make the payments. They might have forgotten the due date, paid or posted the amount at the wrong bank account, or the transfer might have had some issues.

Sending a friendly payment reminder is enough to let your customers know of the missed payment. Our advice is to use a kind tone of voice when sending the message. This is more likely to bring positive results than being rude or threatening to a customer.

Initial Payment Reminder Template: One Week Before the Due Date

Text Message:

Hi Greg,

This is just to remind you that the payment on xxx, which we sent on March 25th, will be due next week. We’d appreciate it if you could settle the payment when you get a chance. Thank you!

Why this payment reminder works: In your first reminder, you are polite, concise, informative, and short. You are not sharing too much information and you are not demanding the payment straight away. You are simply advising that the customer will need to settle the payment when he/she gets the chance, so this is at their convenience. Moreover, you specify a deadline for when this needs to happen, showing a professional tone of voice.

Overdue payment reminders

If the debt remains unsettled and the customer has missed the agreed date to make the payment, they fall in the overdue phase or delinquency stage. Also, during this time the customer did not try to make any contact with you since receiving the first friendly payment reminder.

In this stage, it’s critical to make them aware of the overdue payment and request them to complete that as soon as possible.

Sometimes you might feel like you want to avoid confrontation, you don’t want to sound too harsh, but you want to receive the overdue payment. So, how do you overcome this?

To strike the balance between sounding too severe, or making the customer feel more uncomfortable than they already are, you should use a professional, yet firmer voice.

bad customer service post - good example

Overdue Payment Reminder Template: One Week After Late Payment Was Due

Text Message:

Hi Greg,

Our records show that we haven’t yet received payment of £540, which is overdue by 1 week. Please check this from your end if there has been a mistake. Otherwise, you can make a payment by following this link: https://ergopay.com Thank you.

Why this payment reminder works: This text message works because your tone of voice is still professional, but firm. You specify the amount that is due, making it more formal than your initial reminder. Also, it’s important to let the debtor know how long the payment was overdue, it adds more clarity and a sense of urgency. The link in the message gives the option to make the payment in full or partially, increasing the chance of receiving the payment.

Final notice

Another important stage in the collection process is the final notice which is usually done via a letter. It is the last communication between the company and the client regarding the past amount due. At this point of the final notice, it’s better to let the delinquent client know that you are no longer going to work with them to resolve the payment.

The main objective at this stage is to get the payment. A poorly written final notice letter might confuse, or even worse, the client can continue to ignore you.

Final Notice Template:

“Dear Client,


It has come to my attention that you have not complied with our formal requests for payment. Please see the attached invoices that document the sum of your outstanding balance past due. On [date] you approached our company for [product or service provided]. The service was completed expeditiously and by our [agreement or contract]. The total balance due is [amount]. It is very important that we hear from you regarding your payment intentions on this account.


We will delay any action for 10 business days, until [date; Note: assuming this is 10 business days from the date of the letter] to allow you the opportunity to make payment arrangements. Be advised, the next step is to place your account with a collections agency. Please contact the undersigned no later than [date] to let us know of your intentions. According to to the credit agreement you signed, we will be adding [30%] to the total balance to cover the cost of collections once we place your account with National Service Bureau.





[Phone Number]


Source for the template

Direct contact

If the client hasn’t responded to you any for your forms of communication like email, phone calls, texts, or letters, you can consider seeing your customer in person.

Dealing with creditors can be difficult especially if the client is in a vulnerable position. Vulnerability can mean dealing with the loss of a loved one, being sick, having mental or physical health problems, and more.

Showing empathy for vulnerable people is important and reaching out to a solution that benefits both parties is crucial.

Formal letter of demand

Did you have exhaust all the possible means to contact your customer and still no response? You may consider a formal letter of demand at this point. Remember to consider this as the last resort because it might damage the relationship with your customer.

late payments letter

Best Communication Method for Late Payments and Debt Recovery

SMS payment reminders are very easy to set up. Having 98% open and read rates, it is a popular communication channel that delivers instant results, cost-effectively.

Setting up the automated text messages for debt recovery takes no more than a few minutes when using a reliable communication platform. All you have to do is create your templates, add your contacts, and schedule the campaigns.

For even more efficiency and return on investment, try extending your SMS for debt collection with a recovery payment method such as rich messages. This type of message offers the option to add a link to your SMS messages. These links are secure mobile landing pages that are fully personalized to your brand’s identity.

Here, you can present the customer with multiple options such as:

  • setting up different smaller payments
  • saving the date in calendars so they don’t forget
  • contacting agents
  • making a payment in full
  • making a partial payment

Rich Media Messaging is a text messaging solution that adds more value to traditional SMS because of its rich content and extended features. The web pages are fully secure and there are customer identification and verification steps that can be included in the process.

VoiceSage’s clients achieved results like 20% ROI within the first year of using the late payments solution and increased payment rates by up to 50%. When it comes to contact centre agents’ costs, their job became more productive because there was a 30% reduction in inbound agent calls. So while customers were paying their debt, agents could focus on more important customer service tasks.

Prevent Late Payments in the First Place

We have given you a few templates for payment reminders that we hope will help you increase payment rates. Because late payments can be embarrassing for debtors and time-consuming for the business and debt collection agencies.

So, you should prevent these from happening in the first place. Have a look at the tips below to avoid late payments as much as possible:

  • Honesty: If you have been in a situation where customers didn’t pay you on time, then consider letting them know gently to be aware of the repayments terms before helping them. This is a transparent method of communication that will be appreciated by your customers.
  • Time: It’s simple. You need to be aware of the specific time frames that your customer needs to repay you. Mention as many times as possible the due date or the number of days overdue for the payment to be clear about the final date.
  • Options: Giving customers as many self-serve options as possible when dealing with payments is important. Some vulnerable customers will prefer to make an online payment rather than speak with an agent on the phone. Or some might prefer multiple partial payments because of their situation. Be mindful of their preferred communication channels and contact them at the time when they are more likely to pick up or respond to your messages.

mobile payments

Wrapping Up Late Payments

Keep in mind that late payments are rarely a personal attack. Many times, delinquent customers have been busy, distracted, or dealing with a personal matter.

So, whether you are sending a first SMS payment reminder or many overdue messages, remind yourself that you need to do this with empathy. Even when taking a firmer approach, you can still be professional and concise.

If you are looking for a solution to send payment reminders to your customers, whether that is via phone, text messages, email, or rich messages, contact us and we’ll arrange a demo for you.

Book a Demo

Published on: 26th November 2021

Blogs and guides

News, opinion and solution guides for organizations operating contact centres

cloud communication platform

Cloud Communication Platforms: What’s the Catch and How to Choose the Best One for Your Organization

Business customer communication plays a pivotal role in the success and growth of any organization and usually this is delivered by a cloud communication platform….

Read more
rich messaging banner

Elevate Brand-Customer Communications with Rich Messaging

One powerful tool that is revolutionizing brand-customer interactions is rich messaging. In today’s dynamic and fast-paced digital landscape, effective communication is the key to building…

Read more
omnichannel customer journeys

Top Tips to Create an Omnichannel Customer Journey

Creating an effective omnichannel customer journey requires careful planning and execution. When customers interact with your brand, they will use a few or all your…

Read more

Book a Demo

Experience VoiceSage for yourself with a personalised demonstration

Book a demo with one of our customer engagement experts.
See how VoiceSage transforms outbound and inbound customer contact operations.

Book a Demo