Reminder letter for unpaid or unperformed services

In the event of non-payment or non-performance of a service, a dunning letter offers the customer or supplier an opportunity to settle the situation amicably. It precedes the formal notice of default, and although it is not obligatory, it is nonetheless strongly recommended. It is possible to send several dunning letters for the same unpaid invoice.

What are the payment deadlines?

Whether for goods or services, payment terms from private individuals to professionals are not regulated by law. Professionals are free to set the payment terms they wish to apply.

By default, the individual customer must pay the company's invoice on receipt. However, the company may choose to specify a different timeframe on its invoice, for example by adding the words "payable X days from receipt of invoice".

On the other hand, when sales are made between professionals, there are rules laid down in the French Commercial Code and General Tax Code. Payment terms must be specified in the general terms and conditions of sale, as well as on the invoice.

Professionals must choose one of the four statutory payment terms:

  • Cash payment: the customer must pay the full amount due upon delivery of the goods or performance of the service;
  • Payment on receipt: a period of at least one week is allowed from completion of the service or delivery of the goods, including the time required to receive the invoice;
  • Payment by default: the customer must pay the invoice no later than the 30th day following completion of the service or delivery of the goods. This is the default payment deadline when no payment deadline is mentioned in the general terms and conditions of sale or on the invoice;
  • Negotiated payment terms: when a specific clause is included in the general terms and conditions of sale, or when both parties have reached an agreement, payment terms can be extended to 60 days from invoice date. This period, if mentioned in the contract binding the two parties, can be reduced to 45 days end of month from invoice date.

Two methods of calculation are permitted for the 45-day month-end period. In the first case, 45 days are counted from the date of issue of the invoice, and the period is extended to the end of the corresponding month. In the second case, regardless of the date of issue of the invoice, the 45-day period is calculated from the end of the month of issue.

In a number of sectors, payment terms are shorter, and payment with a negotiated term is not permitted. This is particularly the case for certain food and beverage products, such as fresh meat and live cattle, where payment must be made no later than 20 days after delivery, but also in the transport sector, which stipulates a maximum period of 30 days for car rentals, road haulage and air freight.

When should I send my customer a reminder letter?

The dunning letter can only be sent to the customer once the due date has passed. As long as the maximum period has not elapsed, the customer is assumed to be able to pay on time.

Sometimes, a single reminder letter is enough to remind the customer of his obligations. If this is not the case, it is perfectly possible to send several successive reminder letters, taking care to allow a reasonable period of time to elapse between two letters. This period is not fixed by law, and is therefore left to the discretion of the company wishing to recover its unpaid invoices.

Generally speaking, it is customary to send 2 or 3 reminder letters before sending the customer a formal notice to pay, which is the last step before legal proceedings.

What should a reminder letter contain?

A dunning letter is an amicable collection attempt. It has no legal value, but simply serves to remind the customer of his obligation to pay the unpaid invoice as soon as possible. It can be sent by post or e-mail.

At this stage, the aim is to recover the sums owed, while trying to maintain satisfactory commercial relations with the professional or private customer. Pressure tactics, which are punishable by law, are strongly discouraged. The tone used in a reminder letter should be courteous and concise, and the author should confine himself to recalling the facts.

The dunning letter must include the invoice number, amount and due date. It must also include the company's contact details and those of the customer. The date of writing must be specified on the dunning letter, which can be sent by registered mail or by ordinary post.

Finally, the dunning letter must ask the recipient to pay the amount due as soon as possible.

Download a sample unpaid reminder letter

Unpaid invoices: is there a statute of limitations?

Unpaid invoices cannot be claimed forever. There is a statute of limitations, beyond which it is no longer possible to initiate legal proceedings for their collection.

When an unpaid claim relates to goods or services supplied by one professional to another, the limitation period is 5 years. The company therefore has 5 years to obtain payment of the sums due.

On the other hand, when the unpaid invoice relates to goods or services supplied by a professional to a private individual, the limitation period is reduced to 2 years. After this period, it is no longer possible to demand payment of the invoice.