When a company demands payments from a client or customer with more than usual outstanding funds or amounts, the company is required to inform the customer about how the company wants the customer or client to make the payments. For example, a client owes $10,000 to a company for 5 different invoices with $2,000 per invoices. So, the company gives instructions to the client that he is required to make at least 40% of the total payment in first week where the rest of the 60% can be divided in 5 equal installments and these installments need to be paid in the next 3 months.
In this situation, when the customer receives the instructions, he can negotiate with the company in order to settle the payments or change the instructions. Supplier and companies usually don’t use this notice for specific accounts payments instructions but there are some circumstances in which it is necessary to address the customer regarding the payment instructions. When this is required, the company is legally obligated to inform the customer about the decided payment instructions ahead of the time so that if the customer is not happy or comfortable with the payment instructions, he has enough time before deadline to dispute or negotiate the terms.
Why and when Companies Settle Multiple Invoices in One Payment?
Usually companies don’t force the customers to settle multiple invoices in one payment but there are some situations in which this is really important for the company. For example, the company finds out that the customer is not paying outstanding dues for quite some time and it is the last possible way to settle the payments by including all the invoices in single payment. Another situation is when the annual audit is near in future and the company wants to settle all the outstanding payments before the audit. Another most common reason for settlement of multiple invoices in one payment is when the company is about to go out of business and before all the partners walk out, it is important to settle all the outstanding payments.
Key Elements to include in the Payment Instructions for Specific Accounts:
- Name of the person who is sending the letter to the customer with complete address
- Name of the company with complete address
- Name of the customer or client with complete address
- Date when the letter is being sent to the customer
- Details of each invoice that is included in the letter
- Details of the total payment that the customer or client owes to the company
- Payment instructions with particulars i.e. first payment, second payment and dates when the customer is required to make the payments etc.
- Reasons why the company wants to settle multiple invoices in one payment (if applicable)
- Specific terms about the instructions that the company may negotiate in case the customer wants
- Time frame for respond from the customer
- Legal actions that the company can take in case there is no respond from the customer
- Signature of the authorized person in the company i.e. collection officer
Here is preview of a Free Sample Sample Bank Letter with Payment Instructions (Multiple Invoices) created as fill-able PDF Form,
Here is download link for this Sample Bank Letter with Payment Instructions (Multiple Invoices),
