Notice to a client for outstanding payment is a document, that is prepared by an organization, in which it addresses the client, and notifies it about the outstanding payment. It serves the purpose of notification as well as a warning letter, as it states the consequences or the actions that the organization may take in case the client does not make his due payment.
Sometimes, the client does not make timely payments, which is crucial to the organization’s operations and cash management. An organization may need to:
- Make payments to the suppliers for the materials bought for the client’s project.
- Buy more raw materials for new clients’ projects.
- Make payments to the workers.
- Make payments to the bank or other financial institutions, etc.
Therefore, if the organization will not receive the money on time, its work and business relationships would get affected. Therefore, when a client has outstanding payments to make to the organization, the organization sends him a notice. The content of the notice to the client for outstanding payment can vary as per:
- The circumstances.
- The duration of the delayed payment.
- The relationship with the client.
- The organization’s policies.
- Effects of the delayed payment on the organization, etc.
However, a general template of such notices includes the following details:
- Date.
- Details of the client.
- Details of the organization.
- The issue of outstanding payment.
- Reference to the contractual terms and clauses.
- Effects of the late payment on the organization.
- Give notice for the release of payment.
- Provide a deadline for the payment.
- Warn and state consequences in case of no action.
- Show hope of cooperation.
This notice, usually, does not go unnoticed, and the client takes some action, whether it is the release of the payment or asking the company for a certain time to arrange the payment. As this notice also gives a warning, the client wants to avoid the consequences, especially the legal ones, and hence, this letter pushes the client to clear the payment.
This notice is kept in the records of the organization and can be used as a reference or evidence if required. For instance, if legal action is to be taken by the organization, this notice can be presented to the court to show that the client has been clearly notified and requested for the clearance of the outstanding payment.
Sample Notice to Client for Outstanding Payment
Date
Dear Ms. Emily,
It is to notify you that ABC Limited has outstanding payment toward our company XYZ Limited for the project [X], completed on 7th June 20XX.
When we signed the deal, it was mutually agreed on, that the payment would be released immediately after the delivery of the project, at a maximum within three days. However, a month has passed since the delivery date, and we have not received our payment. We need our money soon, as it is affecting our operations as well as the payments to our suppliers.
Kindly, process our request soon and release the amount by 15th July 20XX. As per the contractual clauses, if you will not make the payment, we will be forced to take legal action, the consequences of which can be huge for your company in terms of money and reputation.
We hope you would cooperate with us by giving the payment on time, and we can close the deal on a good note.
Thank you.
Regards,
Martha Stone.
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