Letter for Recovery of Outstanding Dues (UK) #

If a business owes you money and has failed to pay, you have the right to demand payment through a formal debt recovery letter. This can be a first reminder, a final demand letter, or a legal warning before court action.

💡 Why Send a Formal Letter?
A professionally written letter strengthens your legal position, documents your attempts to recover the debt, and encourages prompt payment.

⚠ Key Tip: If the debtor ignores your letter, you may proceed with court action or hire a debt recovery agency.

📌 What to Include in Your Letter? #

A strong letter should contain the following elements:

• Your Business Details – Company name, address, contact information.
• Debtor’s Details – Name, business address, and contact information.
• Invoice Reference & Due Date – Clearly specify the unpaid invoice(s).
• Total Amount Owed – The outstanding sum, including interest if applicable.
• Legal Basis for Claim – Refer to the contract or agreement breached.
• Payment Deadline – Give a firm deadline for payment (e.g., 7 or 14 days).
• Consequences of Non-Payment – State the next steps (legal action, late fees, court claim, etc.).
• Payment Instructions – Provide bank details or payment methods.

📄 Letter Templates #

📝 Note: Replace text in brackets [ ] with your specific details before sending.

First Reminder Letter for Outstanding Payment #

Subject: Reminder – Outstanding Payment Due [Invoice No.]

[Your Business Name]
[Your Address]
[Your Email]
[Your Phone Number]
[Date]

[Debtor’s Name/Business Name]
[Debtor’s Address]

Dear [Debtor’s Name],

We are writing to remind you that invoice [Invoice Number], dated [Invoice Date], remains unpaid. The total outstanding amount is £[Amount], which was due on [Due Date].

• Payment was expected within [Payment Terms, e.g., 30 days].
• Please arrange full payment within [7/14] days to avoid further action.
• Payment details:
  • Bank Name: [Your Bank]
  • Sort Code: [XX-XX-XX]
  • Account Number: [XXXXXXX]
  • Reference: [Invoice No./Company Name]

If payment has already been made, please disregard this notice. Kindly confirm once the transfer has been completed.

Best regards,

[Your Name]
[Your Position]
[Your Business Name]

Final Demand Letter for Payment (Before Legal Action) #

Subject: Final Demand – Immediate Payment Required [Invoice No.]

[Your Business Name]
[Your Address]
[Your Email]
[Your Phone Number]
[Date]

[Debtor’s Name/Business Name]
[Debtor’s Address]

Dear [Debtor’s Name],

Despite previous reminders, we have not received payment for Invoice [Invoice Number], dated [Invoice Date]. The total outstanding amount of £[Amount], plus any applicable late fees, remains unpaid.

This is a final demand for payment. If we do not receive full payment within [7] days, we will have no choice but to escalate the matter, which may include:

• Initiating legal proceedings in the Small Claims Court.
• Instructing a debt recovery agency to recover the funds.
• Claiming statutory late payment interest and compensation under the Late Payment of Commercial Debts Act 1998.

To avoid further costs and legal action, please make full payment immediately.

Payment details:

• Bank Name: [Your Bank]
• Sort Code: [XX-XX-XX]
• Account Number: [XXXXXXX]
• Reference: [Invoice No./Company Name]

Yours sincerely,

[Your Name]
[Your Position]
[Your Business Name]

Letter Before Action (LBA) – Legal Notice #

Subject: Legal Notice – Outstanding Debt Recovery [Invoice No.]

[Your Business Name]
[Your Address]
[Your Email]
[Your Phone Number]
[Date]

[Debtor’s Name/Business Name]
[Debtor’s Address]

Dear [Debtor’s Name],

We refer to previous correspondence regarding Invoice [Invoice Number], which remains unpaid. The total outstanding balance is £[Amount], and despite multiple reminders, we have not received payment.

This is a formal Letter Before Action (LBA). If we do not receive full payment within [7] days, we will initiate legal proceedings.

• Legal action may result in additional costs, including court fees, interest, and legal expenses.
• To avoid these consequences, we urge you to make full payment immediately.

Payment details:

• Bank Name: [Your Bank]
• Sort Code: [XX-XX-XX]
• Account Number: [XXXXXXX]
• Reference: [Invoice No./Company Name]

If payment has already been made, kindly provide proof of transaction. Otherwise, failure to comply will result in court action without further notice.

Yours sincerely,

[Your Name]
[Your Position]
[Your Business Name]

⚖ Next Steps if Payment is Still Not Made #

• Use a Debt Collection Agency – They specialize in recovering debts.
• File a Claim in Small Claims Court – If the debt is under £10,000.
• Apply for a Statutory Demand – If the debt is over £750.

📌 Learn more about debt recovery legal action

💡 Don’t let unpaid debts go unresolved. Take action today to recover what you’re owed! 🚀