Credit / Invoice / Payment / Demand Letter

A. Credit

Granting of credit means allowing for the delivery of goods or performance of services without first receiving payment. Credit is very common in both the consumer and business context (e.g. credit cards) and would induce sales by allowing the customer to buy goods and services without first having the available sales.

It is essential for a company to ensure that the customer has the ability to repay for the goods and services rendered. This is usually done by a credit check.  Below are some common credit documents:

Request for Credit  - Customer applies or requests for credit.

Credit Reference - Seller checking with credit agency / other vendors on credit history.

Credit Acceptance - Approval of credit to customers specifying the amount granted with a welcome message.

Credit Refusal - Refusing credit in a positive way, and suggesting that they reapply in the future.

B. Invoice and Payment

An invoice is a commercial document issued by the seller to the buyer in connection with a sales transaction, indicating the product, quantity, and agreed price of the product or service provided by the seller to the buyer.

Payment terms are usually written on the invoice. These terms may stipulate that the buyer has the maximum number of days to pay and sometimes offers a discount if paid before the due date. The buyer then makes the payment for the products or services listed on the invoice.

C. Demand Letter

The granting of credit may always result in the lapse of payments by a few customers, regardless of how carefully the credit check had been done. Therefore, banks need an instrument to issue a demand for payment. Writing a demand letter is a delicate matter since your aim is to "demand" payment from the customer without offending the customer or damaging the goodwill (at least for the first letter). It is important to be persuasive instead of sounding demanding. Yet one will need to be firm, tactful, and polite at the same time, which is a difficult art to master. 

The way to do so is to be customer-oriented when writing the first demand letter. Prior to doing so, one would generally start with sending an additional outstanding invoice stating clearly "Past Due", followed by a phone call to remind the customer. If that fails, one would start with a mild reminder that there has been an oversight in payment, then the tone gradually intensifies with the second letter, with a final letter reminder threatening to commence legal proceedings or refer to a collection agency if they do not pay within a certain time frame. In all cases, the payment demand should have the following elements:

  1. the overdue amount;
  2. the original due date and how long it has been past due;
  3. ask for immediate payment or other options for the customer to take (e.g. installments). 

Below are some examples we have on DocPro:

First Payment Reminder for Goods and Services - Friendly reminder that the payment is past due.
Second Payment Reminder for Goods and Services - A more forceful reminder demanding the overdue amount be repaid immediately. 
Final Payment Reminder for Goods and Services - Letter before action threatening legal action or past to collection agency.

Letter to Supplier Requesting for Additional Credit Terms
Coronavirus / COVID-19
Payment Reminder for Goods and Services
Letter before Action / Final Demand
Demand Letter: Landlord-Tenant
Letter of Demand
Purchase Reimbursement / Loan Repayment
Letter of Direction of Payment to Third Party
Payment Instruction with Indemnity
Payment Reminder for Goods and Services
First Reminder
Payment Reminder for Goods and Services
Second Reminder
Letter of Payment - Unpaid Payment
Supplier- asking for uncleared balance
Apology Letter - Billing Mistake
Clerical Billing Error in Invoice
Apology Letter - Payment
Invoice Delay / Omission
Unpaid Invoice for Goods and Services
Turn over to Collection Agency
Hardship Letter
Late Payment
Letter of Payment - Discount Request
Supplier- disagree discount request
Response to Customer
No Error in Collection Letter / Invoice
Apology Letter - Payment
Collection Error / Clerical Error
Apology Letter - Payment
Mistake in Receipt Issued
Complaint Letter - Payment
Collection Error
Complaint Letter - Product
Invoice Error - Different from Quotation
Complaint Letter to Supplier
Billing Error in Invoice
Payment Reminder for Goods and Services
Acknowledgement of Partial Payment and Extension
Product / Goods Request
Refusal of Credit
Apology Letter - Payment
Receipt Delay / Omission
Hardship Letter
Collection Letter
Letter of Payment - Defer Payment
Supplier- disagree to defer payment
Product / Goods Enquiry
Delivery Method / Payment
Product / Goods Request
Approval of Credit / Open Account
Product / Goods Request
Credit Reference
Product / Goods Request
Request for Credit / Open Account
Product / Goods Request
Request for Credit Reference
Rejection of Product Order
Lack of Credit
Response to Customer
Attached Invoice - long-term clients
Response to Customer
Attached Invoice - once purchase clients
Response to Customer
Modify discount errors
Response to Customer
Return packing case
Response to Customer
Supplier- asking for monthly payment and unpaid balance
Response to Reminder for Payment
Payment Deadline Not Yet Due
Response to Supplier
Customer - explain unpaid balance reason
Response to Supplier / Seller
Client/Buyer response - error invoice amount
Response to Supplier / Seller
Seller- reply statement error and confirm the deductions
Rejection of Product Order
No Payment
Cheque Request Form
Request Form


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