How to Chase Outstanding Invoices? – With Email Templates

28 December, 2022
8min read
Kiran Rana, General Manager, Mid-Market
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What you'll learn

  • An outstanding invoice indicates that your client has not yet met the payment deadline but has not yet paid for a service
  • A reminder email to alert the client about the closing due-date can ensure faster payments
What is an outstanding invoice?
What is the difference between outstanding and past-due or overdue invoices? 
How to collect on time for outstanding invoices?
How do you write an outstanding invoice email or letter?
Enable frictionless billing and tracking with EIPP automation software 
FAQs of outstanding invoice
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An invoice specifies the terms of payment and demonstrates the preferred mode of payment, the due date, and the specifics of the delivered goods or services.

The term “outstanding invoice” refers to an invoice that has been issued and is awaiting payment. These unpaid bills can start out as a minor inconvenience before snowballing and endangering your company’s viability. If your cash flow is disrupted, you may no longer be able to pay your staff, vendors, and suppliers, and keep your business running.

However, there are certain steps you can take to stop unpaid invoices from becoming bad debt.

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What is an outstanding invoice?

An outstanding invoice is sent to the client for which the due date has not passed, and the payment is pending.
At first glance, an unpaid invoice doesn’t seem to be a problem. The client may still pay the invoice before the due date. However, pursuing a past-due invoice would cost you time and money. Financial experts have observed that rather than waiting for past-due bills, you’re more likely to get paid if you develop a payment strategy that targets clients when invoices are still outstanding.

What is the difference between outstanding and past-due or overdue invoices? 

When discussing an invoice’s payment status, the words “outstanding” and “overdue” are frequently used interchangeably. However, the two words are not synonymous, and there is more to the difference than semantics.

An outstanding invoice indicates that your client has not yet met the payment deadline but has not yet paid for a service.

When an invoice is past late, your client has not honored the terms of his agreement to pay for the service. The time limit for doing this has now passed. This is often referred to as an overdue or past-due invoice.

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How to collect on time for outstanding invoices?

Let’s first understand why an invoice is classified as outstanding.

  • There is a credit period associated with the invoice yet to be paid
  • A certain amount of the invoice is deducted and is yet to be paid.

Now that we know what conditions can cause a delay in the payment of invoices let’s look at some tips on how to avoid delayed payments and close the accounts receivables as soon as possible.

1. Attractive rewards for on-time payments and penalties for late payments

Everyone likes a good deal so incentives like discounts and rebates for early payments increase the likelihood that payments will be paid as soon as possible. To encourage clients to make on-time payments, which necessitates a certain level of discipline, late payment penalties in the form of interest are charged.

2. Alerts and repeated reminders

It is usually a good idea to remind the client after the invoice has been delivered. An alert can be delivered by phone, email, or other methods. One must send reminders respectfully and professionally to keep the client’s trust.

3. Flexibility in terms of the payment method

When a customer has multiple options for how to pay, it enables quicker payments because they have the freedom to do the same. Given the importance of convenience, both the client and the company benefit from this. With the development of digital payments today, methods like the ACH channel may make money transfers happen faster.

4. Stop fulfilling orders until you get paid

The best way to deal with customers who don’t pay their bills on time or make erratic payments is to stop filling their order requests until their debts are paid in full. If not, the obligations will keep piling up without any payment being made in exchange for the given items. Although some customers may find this pushy strategy offensive, it can be quite successful. And the client will receive the message that the supplier should not be taken for granted.

How do you write an outstanding invoice email or letter?

A part of early payment recovery is sending reminders to alert the customer about the closing due date. The most prominent method to reach out to your client is via email or snail mail. Since we are already in the digital age, businesses prefer dealing through emails. 

The only other duty you need to complete is gently enquiring and following up to ensure everything is on track for the client to pay by the due date. This is in addition to credit control best practices like raising and issuing invoices as near the sale date as feasible. This technique makes sure that your invoice is fresh in their minds and makes it more difficult for them to “forget” to pay. It also helps to establish and keep a solid working relationship.

Here is a sample of how your notification email should look like:

Hi {Recipient’s name}

I hope you are well.

This is a reminder email to notify you that an amount of [amount owed on invoice] in respect of our invoice [invoice reference number] is due for payment on [date due].

It would be really great if you could confirm that everything is on track for payment.

Here are the details for your reference: 

  • PO number: {{AR Invoice: AR PO Number}}
  • Invoice Number: {{AR Invoice: Document Number}}
  • Amount: {{AR Invoice: Invoice Amount:#,###,###.00}}
  • Due Date: {{AR Invoice: Due Date}}

If you have an A/P coming up, I would recommend getting these processed.

Let me know if you have any questions about these invoices.

Note: You could also make a payment online using ACH or your credit card at our portal.




Enable frictionless billing and tracking with EIPP automation software 

To maintain a smooth transaction process without any delayed payment or disputes, customers and suppliers should always be on the same page. However, there is often a lack of transparency between customers and providers, which could subsequently snowball into more severe issues. 
With the use of a central portal, consumers and suppliers can easily examine and track bills without the assistance of a third party and stay on the same page at all times. They can communicate easily with the self-service portal, which reduces arguments and overdue payments. Companies may more easily evaluate their accounts payable(AP) and accounts receivables (AR) operations and create the appropriate strategies for improvement when there is visibility, which ensures stability and control.

HighRadius’s automation solutions enable users to:

  • Choose ready-to-use email templates for invoice correspondence
  • Automatically attach the relevant associated documents with the open accounts such as—claim documents, purchase orders, promissory notes, invoices, and so on
  • Capture all the customer response in the database
  • Pay through a self-service portal that provides a wide range of payment options such as—ACH, credit cards, PAD, PayPal, NACH, SEPA, direct debit, GiroPay, iDEAL, Bancontact and Trustly

FAQs of outstanding invoice

Q. How long can an invoice be outstanding?

Unless there is a predefined agreed-upon due date, the invoice can remain outstanding for as long as 6 years.

Q. Does outstanding mean overdue?

When an invoice is marked as outstanding, the client isn’t technically late because the payment due date hasn’t yet passed. The unpaid invoice becomes past due once the deadline has passed.

Q. Should you get a debt collector for outstanding invoices?

Outstanding invoices do not imply that the customer will not make the payment by the due date. However, it is essential to identify bad debt cases early on and act accordingly. A frequent delinquent customer can choose to delay the payment this time too; hence identify such cases and send them regular reminders till the due date approaches. 

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