Creating an invoice for a remaining balance due is an opportunity to finish a project smoothly and leave a positive, lasting impression on your client. Whether it’s the final instalment on a big project or a smaller follow-up payment, a well-structured balance due invoice can help you get paid faster, avoid unnecessary back-and-forth, and keep your client relationship strong. Nearly half of the invoices US businesses send out become overdue, but follow-up invoices can help speed up the payment process and avoid this common issue.
Below, we’ll explain how to create a balance due invoice, how to reference previous payments, how to display the remaining amount, and tips for including any extras, such as late fees and early payment incentives.
What’s in this article?
- What’s a remaining balance invoice?
- How to structure a balance due invoice
- Setting payment terms and due dates for the final balance
- Avoiding common mistakes when sending balance due invoices
- How to handle adjustments or disputes on remaining balance invoices
What’s a remaining balance invoice?
A remaining balance invoice is a document a business issues to a customer to collect any unpaid portion of a previous bill. If a customer makes a partial payment or has an outstanding balance on an initial invoice, a remaining balance invoice itemises what’s still owed. It typically includes the original invoice details, any payments already made, the outstanding balance, and updated payment terms.
How to structure a balance due invoice
Your balance due invoice should be structured to show the customer what they owe, what the payment is for, and how they can contact you with any questions. Adding a summary at the top with the outstanding balance and due date helps customers quickly understand what they need to do next. Each section of your balance due invoice should be visually distinct with headers or bolded text for easy scanning. Here’s how to structure your invoice.
Header
Business name and logo
Business’s email, phone number, and address
Invoice title (e.g., “Balance Due Invoice”)
Customer information
Customer’s full name or business name
Customer’s billing address, email, and phone number
Invoice details
Date of issue
The original invoice number for which a balance is still due
Itemised list of products and services
Remaining balance due date
Balance summary
Original invoice amount
Payments made and their dates
Outstanding balance
Payment instructions
Accepted payment methods
Online payment link or postal address for cheques, if applicable
Additional notes or terms
Late fees
Early payment discounts
Further payment instructions
Setting payment terms and due dates for the final balance
Setting payment terms and due dates for the final balance helps customers understand their obligations and plan their payments accordingly. Here are some tips for doing so:
For payment terms, state both the payment timeline (e.g., net 30, net 15) and the actual due date for maximum clarity.
State preferred payment methods – whether they’re credit cards, bank transfers, or cheques – and include any necessary payment instructions. If there’s a processing fee associated with a certain method, mention that as well.
Consider using late fee penalties and early payment discounts to incentivise timely payment. For late fees, businesses will often charge a small percentage (e.g., 1%–2%) for each month the payment is overdue. Mention when this late fee applies (e.g., after a 10-day grace period). For early payments, businesses might offer a 2% discount for payments received within 10 days of invoicing.
Avoiding common mistakes when sending balance due invoices
Sending balance due invoices requires careful attention to detail. Missteps can delay payments or confuse clients. Here are some common mistakes and tips on how to avoid them.
Forgetting to reference the original invoice
Failing to include the original invoice number or payment history can make it difficult for the client to track the balance due. Always reference the original invoice number and list any payments already made.
Not setting a due date
Stating general terms such as “net 30” or “due soon” without a specific date can cause confusion. Always include an actual due date to minimise misunderstandings about payment timelines.
Being vague about late fees
Not mentioning late fees up front can frustrate customers. Outline any late fees in the payment terms section of the invoice. Specify both the rate (e.g., 1.5% monthly interest) and when it will begin to accrue so customers know exactly what to expect.
Sending invoices without payment instructions
Omitting payment instructions makes it harder for clients to pay and can delay processing. Include details on accepted payment methods (e.g., bank transfer, credit card, cheque), with all necessary account or link information. Mention fees associated with certain methods (e.g., credit card processing) to avoid surprises.
Poor formatting and lack of clarity
Sending an invoice that’s cluttered or poorly formatted can lead to confusion and payment delays. Use a structured format with headings and easy-to-read sections for balance due, payment history, and terms. Highlight or use bolded text for the remaining balance and due date so they stand out.
Not following up on overdue payments
Set reminders to follow up with clients a few days before the due date and again immediately after, if the invoice becomes overdue. Tools such as Stripe Invoicing can automate friendly reminders and follow-up emails.
Skipping balance details
Not including an itemised summary, even if it was on the original invoice, can make the client question the balance. List the items or services that the remaining balance covers to avoid disputes and reassure clients about the legitimacy of the charge.
Omitting a personal touch
Sending a purely transactional message can come across as impersonal, especially if the client had issues or questions with prior invoices. A simple line such as, “Please let us know if you have any questions about this balance or need assistance with payment,” adds a personal touch and shows you’re open to addressing any concerns, which can foster goodwill and encourage prompt payment.
Not using early payment incentives
If early payment would benefit your company, consider including a small discount (e.g., 1%–2% if paid within 10 days). This can encourage faster payments without much financial impact.
Ignoring automation options
Manually tracking balance due invoices can lead to errors, delays, and missed follow-ups. Consider using invoicing software like Stripe Invoicing for automated invoicing features, including payment tracking and reminders.
How to handle adjustments or disputes on remaining balance invoices
A friendly, solution-oriented approach can help you handle disputes. Responding promptly and being transparent about your pricing and process shows clients they’re valued, even during difficult conversations. Here are some tips for managing this process.
Respond quickly to disputes or adjustment requests
When a client questions a balance, respond quickly. Review their concern in detail, whether it’s a potential billing error or an issue with the product or service itself. This shows clients you’re taking them seriously and keeps the process moving for both parties.
Clarify and correct any mistakes
If there’s a mistake in the invoice (such as a duplicate charge or incorrect rate), fix it and send an updated invoice reflecting the corrected amount – potentially with a quick explanation for the adjustment. A transparent correction can prevent confusion and shows you’re proactive about getting things right.
Provide a breakdown when needed
If the client wants more detail, share an itemised list of charges, including previous payments and what’s covered by the balance. Often, seeing everything laid out can resolve confusion immediately.
Be open to reasonable adjustments
If the dispute is about the quality of the work or extent of the service, consider offering a solution such as a partial credit, a discount on future services, or an adjusted rate. Your flexibility will show the client you’re invested in their satisfaction and can often strengthen relationships and lead to repeat business.
Explain late fees or penalties
If late fees are part of the balance and the client is questioning them, clarify your payment terms. Explain the purpose behind the fees, and if the client has a good history with you, consider a one-time waiver. It’s much easier for clients to accept late fees when they understand their purpose, and a goodwill waiver (when it makes sense) can also reinforce a positive client relationship.
Provide a payment plan for genuine hardships
If the client is struggling to pay, consider implementing a payment plan that enables smaller, staggered payments. A payment plan can help you recover the balance over time without damaging the client relationship. Document the arrangement so everyone’s on the same page.
Escalate gently, if necessary
If the dispute is ongoing and won’t resolve easily, it might be time to gently escalate. Escalation can add urgency to the situation and often encourages faster resolution. Involve a senior team member or use a mediator if the balance is substantial. As a last resort, and only if necessary, consider using a collection agency.
Keep a record of every interaction
Save all emails, call notes, or summaries of any meetings related to the dispute or adjustment. Documentation helps you stay consistent in future follow-ups and protects you if questions come up later.
Follow up once payment is resolved
After the balance is settled (or a payment plan is in place), send a short follow-up message that thanks the client for working through the issue and summarises the final agreement. A final touchpoint makes a positive impression and ensures the matter is fully closed.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.