What Is Payment Terms Change Letter To Customer And What Is The Best Way To Send It?
Payment terms are crucial for business organizations that facilitate flexible payments for their customers. Not communicating payment terms clearly with your customers can lead to a lot of problems, including irregular cash flow. Sending a payment terms change letter to customer is vital to avoid such situations for your business.
This article discusses the significance of payment terms change letter to customer and how you can send them efficiently for your business.
What Are Payment Terms Change Letter To Customer?
Payment terms are essentially guidelines that explain
- How the customer can make their payments to a business.
- When the customer should make their payment.
- What methods of payment that the customer use?
Typically, payment terms are associated with invoice payments, which is common in B2B transactions. A payment terms change letter to the customer is a letter informing the customer about any changes in their payment terms.
It is the duty of a business organization to notify the customer about any changes in their payment terms. Your customers can not comply with your new payment terms if they don’t know about it in the first place. So, sending a payment terms change letter to customer is crucial to ensure proper cash flow for your business.
What Are The Components Of Payment Terms Of An Invoice?
It is essential for businesses to understand the components of payment terms. Why? Because it can help you differentiate what changes you make qualify as a payment terms change. You could also say that a company must send a payment terms change letter to the customer if it makes a change to any elements of the invoicing payment terms. The components of invoicing payment terms include the following.
- Invoice date
- Total amount due
- Payment date
- Time period for paying the total amount
- Advance or deposit stipulation
- Details of the payment plan
- Acceptable payment methods
The list above does not specify all the details you must include in the invoice. But you must notify the customers if you are sure about changing payment terms with customers which include one or more of the above components.
Besides the details in the above list, the invoice would also include other essential information, such as the invoice number, contact information, Etc. You don’t have to include as many details as in your invoice in the payment terms change letter to the customer. But do make sure that you clearly explain the payment terms change to the customer.
Also Read: Policy Change Letter
Why Are Payment Terms Change Letter To Customer So Important?
Your payment terms letter to customer is just as important as your original payment terms. Any changes that you make to the payment terms eventually become the norm and the foundation for your business payment.
The significance and role of changing payment terms with customers is not one you can ignore. Businesses that deal with upfront payments have nothing to worry about payment terms because it doesn’t concern them.
But businesses that facilitate credit payments to their customers, such as B2B organizations require payment terms to ensure seamless cash flow. The nature of credit payments is the number one reason why you need payment terms and discuss the changing payment terms with customers.
It ensures that you have an agreement with the customer about the payment. Not having this agreement with your customers could lead to numerous problems and you do not want to open that door. The most significant concern about not discussing the changing payment terms with customers is the cash flow.
Imagine that your business organization pays off all its bills, suppliers, and other expenses within 30 days. If you don’t have proper payment terms you could sit around waiting for the payment to come through for months. A similar situation can arise if you change your payment terms and don’t send a payment terms letter to customers to notify them of the change.
Also Read: Best Direct Mail Marketing Companies
Payment Terms Change Letter To Customer Examples
The payment terms change letter to customer can change depending on the changes you make to your payment terms. The rule of thumb here is that you must explicitly mention the specific changes to the payment terms. If the changes involve numbers or dates of any sort, mention them clearly in the letter.
Below, we discuss the payment terms letter to customer that a business organization uses for effective communication.
[Customer name]
[Professional title and company name]
[Customer address]
Dear [customer name],
We are writing to inform you about a change in your payment terms with our company. Due to the current economy, cost of capital, and general cost of conducting business, we are forced to change our credit terms effective from the 13th of February.
Our new payment terms are as follows:
3% discount on payments made 7 days from the date of invoice and net 30 days from the invoice date. We would also like to inform you that the terms for all contracts with our company are net 30 days from the invoice date with no retainage.
A late payment charge of 3% per month will be applicable to any account beyond 30 days. It also includes an annual charge of 24%.
We greatly appreciate your business and believe that you will understand the situation and keep supporting us forward. Please feel free to reach to us at [phone number] if you have any questions.
Sincerely,
[Company name]
[Sign]
How Can You Send Payment Terms Change Letter To Customer?
You can send your payment terms change letter to customer using different channels, such as postal mail, email, Etc. However, the more official approach and one that can convey the seriousness of the situation is through professional-looking mail.
You might think this could be a haggle for your business, especially if yours is a digital-first company. Let us put your mind at ease with a simple solution – automation. Yes, you can automate the entire process of sending payment terms change letter to customer using an advanced solution like PostGrid.
Direct Mail Automation
With the help of direct mail automation software like PostGrid, you can quickly print personalized letters to your customers. You can connect PostGrid direct mail API with your CRM solution to print and mail all sorts of direct mail marketing and communication materials. Sending payment terms change letters to customers is only a small part of what PostGrid can do for your business.
Also Read: Best Direct Mail Marketing Services
You can mail invoices, personalized postcards and much more with PostGrid’s direct mail tool. Even bulk mailing is an easy task with PostGrid as it lets you send multiple mailers using a template and CSV file of your contacts. Use the same approach to send your payment terms change letter to customer and automate your communication.
With access to a powerful tool like PostGrid, all you need to do is prepare the necessary templates for your business communication. Once you have the template you can quickly send your bulk mail using PostGrid’s interactive solution. So, if you are looking for the best way to send payment terms change letter to customer, a tool like PostGrid is your best shot.
Talk to our experts and get help to automate the printing and delivery of your payment terms change letter to customer using PostGrid’s robust automated solution.
Also Read: Canada Post Address Change 
