A communication sent to clients or customers when a payment for goods or services remains unpaid past the agreed-upon due date. These notifications typically include details of the original invoice, the outstanding amount, and instructions on how to remit payment. For instance, a business might send a standardized message seven days after an invoice due date, followed by subsequent communications at 14 and 30-day intervals.
The prompt dispatch of these communications can significantly impact a company’s cash flow and reduce the likelihood of bad debt. Historically, companies relied on manual tracking and personalized letters, a process that was both time-consuming and prone to errors. The advent of accounting software and automation tools has streamlined this process, making it more efficient and consistent. Effective implementation of this practice reinforces professional relationships by maintaining clear and transparent communication regarding payment expectations.
