A customer has not paid the invoice: what proves the debt before the demand letter, and which collection route fits it?

Step 1: Reconcile the account before you demand

The first thing the debtor asks about, and the first thing any body hearing the dispute looks at, is the figure. The right figure does not come from the latest invoice alone, but from a full reconciliation of the customer's account: every invoice issued, every part payment received, every credit note or agreed discount, and every accepted return. If you demand a sum and it then turns out that the customer paid part of it, or holds a credit note that was never deducted, your claim loses some of its credibility, and the customer may seize on the error to cast doubt on the whole account.

1. Pull the customer's account statement from your accounting system from the first open transaction to today, not just from the late invoice.
2. Match every invoice against the approved purchase order or quotation and against what was actually delivered, and confirm that prices and quantities agree.
3. Deduct every part payment with its date and method, and keep proof of every transfer or receipt.
4. Deduct credit notes, returns and discounts agreed in writing, and do not ignore anything you promised the customer in an earlier message.
5. Set the due date of each invoice under the contract or the payment terms, and separate what is actually due from what has not yet fallen due.
6. Write the final balance in riyals down to the halala, and make it the only figure repeated in every later message.

If your business issues its invoices through the e-invoicing system, keep the copy issued by the system exactly as it is, since it is the reference you will rely on later. Do not edit an invoice once issued; handle any difference with a separate note that explains its reason, so the accounting trail stays clear to anyone who reviews it.

Step 2: Build the proof file that shows the right in writing

A strong claim does not rest on the parties' trust, but on papers that tell the story of the debt from beginning to end: what you agreed, what you delivered, when, how much is owed, and what the customer said when asked to pay. Gather these papers in one file, in date order, before you write a single line of the letter.

• The signed contract, or the quotation the customer accepted in writing, or the purchase order the customer issued, since it is the basis of the obligation and the payment terms.
• The delivery note, the receipt record or whatever proves acceptance of the service, signed by the customer or confirmed by the customer in a message, since it proves you performed your side.
• The issued invoice with its number and date, and proof that it reached the customer.
• The reconciled account statement you prepared in step 1, ideally with an earlier balance the customer has confirmed, even by a message.
• The written exchanges by email or WhatsApp, especially those in which the customer acknowledges receipt or the amount, or asks for more time.
• Your business's regular accounting books and the customer's account entries in them.

The Evidence Law gives these digital papers clear weight. It gives proof by digital evidence, which includes digital correspondence, digital mail and means of communication, the same standing as proof in writing. It makes non-official digital evidence binding on the parties to the dealing, unless the contrary is proven, in certain cases, among them where it comes from a digital means named in the contract in dispute, or from a documented or publicly available digital means. That is why it helps for your contract to name the email address and mobile number as approved channels of correspondence, and for you to keep chats in full with their dates rather than cropped screenshots.

As for merchants' books, the law makes mandatory, regularly kept books proof for the merchant who keeps them against an opposing merchant, and that weight falls away if the contrary is proven by any means of proof, including the opponent's own regular books. They are not proof against non-merchants, although the court may rely on them to put the supplementary oath where witness evidence is allowed. So if your customer is a merchant, well-kept books strengthen your file, and if the customer is an individual who is not a merchant, do not rely on your books alone, and build the file around the contract, the delivery and the customer's own messages.

Step 3: The informal reminder or the formal demand letter

Not every delay calls for a formal letter on its first day. An informal reminder, by a message or a call followed by an email, suits a regular customer who is late for an administrative reason, and it protects the relationship. But it usually remains a passing message in a chat that sets no final figure, no deadline and no consequence, and it cannot on its own serve as the basis for what comes next.

The formal letter, by contrast, is a written notice that puts the customer in front of a set figure and a clear deadline, and it has a legal effect beyond a reminder. The Civil Transactions Law provides that compensation is due only after the debtor is formally put on notice, unless an agreement or a legal provision says otherwise, and it lists cases where notice is not required, among them where the parties agree, expressly or impliedly, that the debtor is on notice as soon as the due date arrives, or where the debtor declares in writing that it will not perform. Notice may be given by any means the parties agreed, or by any means of notification set by law. So a written notice fixes a clear date on which the debtor was put on notice of its obligation, while what compensation is due on a money debt in particular is for the lawyer to assess case by case.

• The due date has passed and reminders have been repeated with no reply or only vague promises.
• The customer has objected to the amount or the quality after a long silence about them.
• Signs of distress have appeared, such as delays on other invoices or a change of management or ownership.
• You need a fixed notice date before any later legal step.

Step 4: What the demand letter takes from your file

The demand letter is the summary of the file, not a substitute for it. So it is written only once steps 1 and 2 are complete, and it takes at least four things from them:

• The reconciled balance in riyals as it came out of the account statement, with the invoice numbers and their due dates.
• The source of the obligation: the contract, quotation or purchase order, referred to by its date.
• Proof of performance: the delivery note or the acceptance record.
• A delivery method that proves receipt and date, preferably the channel named in the contract.

The mandatory elements of the letter, the payment deadline, the delivery methods and the common drafting mistakes are set out in detail in the demand letter guide, and the full certified text is in the Demand Letter template B-01. If you intend to take the payment order route, keep in mind when sending what the Commercial Courts Law requires by way of a prior written notice stating the date you will apply to the court, as explained in the next step.

Step 5: Choose the collection route after the letter by the state of the proof

The customer's reply to the letter, or silence, is what decides the route. The practical rule is to choose the tool that turns the proof you hold into its strongest possible form at the lowest cost to the relationship:

• The customer admits the sum but has not paid: ask for a written acknowledgment of debt stating the amount, its cause and its due date (B-04). A written acknowledgment closes the argument over the figure and puts your right in writing.
• The customer wants to pay but over time: an installment payment agreement (B-02) with a clear payment schedule and a term dealing with any missed installment, ideally paired with an acknowledgment of debt.
• You want a tool stronger than a promise: ask the customer to issue a promissory note through the Nafith platform for the sum or for each installment (B-05). The electronic promissory note is a commercial paper that can serve as an enforcement instrument, and the Nafith promissory note guide explains how it is issued.
• The customer denies or stalls and your right is in writing: this is where the payment order route before the commercial court comes in, on the conditions that follow.

The Commercial Courts Law allows a creditor, as an exception to the general rules on filing claims, to apply to the court for an order to pay a debt where three conditions are met: the right is proven in writing, the debt is due, and, if it is money, its amount is fixed. The law's Implementing Regulations explain that a debt is of fixed amount where its amount rests on set bases that leave the court no discretion to assess it, and that the application is not accepted if the debtor resides outside the Kingdom. The law requires the creditor to notify the debtor in writing of the demand for payment at least five days before applying, to state in that notice the intended date of applying to the court, and to attach proof of that notice to the application.

Notice how every condition leads back to steps 1 and 2: writing comes from the contract, the invoice, the acknowledgment and the messages, the due date comes from the due date you set, and the fixed amount comes from the reconciled balance. If the amount is genuinely disputed, or part of it is compensation for the court to assess, this route may not suit it, and the lawyer will then judge the better path. This description is for general awareness, and checking that the conditions fit your file, and the filing steps, is a matter for your lawyer.

Step 6: Mistakes that weaken a creditor's file

Most weak claims are weak not because the right does not exist, but because the file does not prove it. Check for these mistakes before you send any letter:

• Demanding a rounded or estimated figure instead of the balance reconciled to the halala, since any gap invites doubt and weakens the fixed-amount condition.
• No proof of delivery or acceptance, since an invoice alone proves that you billed, not that you performed.
• Oral agreements on price, quantity or payment date with no later written confirmation.
• Leaving the whole dealing in a WhatsApp chat with no contract and no account statement, then trying to piece the agreement together from scattered messages.
• Sending the letter by a method that does not prove receipt or date, or to an address other than the one named in the contract.
• Accepting part payments without recording them in the account statement, so the balance is unclear when you demand it.
• Editing an issued invoice instead of handling the difference with a separate note.

Once your file is complete in this way, the demand letter becomes a confident step rather than a gamble, and the route after it becomes a decision based on what you hold. Start with the Demand Letter template B-01, with the Acknowledgment of Debt template B-04 and the Nafith Promissory Note Guide B-05 for what follows the letter. The templates are certified drafts and a strong starting point, and they do not replace a lawyer's advice on a specific dispute.

Frequently asked questions