Overdue Payment Letter Template for Saudi Arabia

The Overdue Payment Letter is a crucial document in Saudi Arabian business operations, serving as a formal mechanism for debt collection while respecting local legal frameworks and Islamic financial principles. It is typically used when payment terms have been breached and informal collection attempts have been unsuccessful. The document must carefully balance assertiveness with compliance with Saudi commercial law and Shariah principles, particularly regarding the treatment of late payments and interest (riba). It forms part of the formal debt collection process and may serve as evidence in subsequent legal proceedings. The letter should be drafted to include specific payment details, clear payment instructions, and appropriate warnings regarding potential legal consequences, while maintaining professional courtesy and respect for local business customs.

1. Sender Details: Full company name, address, and registration details of the creditor

2. Date and Reference: Current date and any relevant reference numbers

3. Recipient Details: Full name, position, and address of the debtor

4. Subject Line: Clear indication that this is an overdue payment notice

5. Payment Details: Specific amount owed, original due date, and reference to original invoice/contract

6. Payment History: Brief summary of previous payment history and any partial payments made

7. Demand for Payment: Clear statement demanding immediate payment with specific deadline

8. Payment Instructions: Detailed banking information and acceptable payment methods

9. Closing: Professional closing with contact information for payment-related queries