How to Write a Collection Letter: A Small Business Guide

Posted by Marilyn Miller on October 18, 2014  /   Posted in Uncategorized

What do you do when a customer’s balance goes past due? Sending your non-paying customers a well-crafted debt collection letter can work wonders. 

Writing a Collection Letter: How To GuideStep One: The first thing to remember is that you must start out with a bold heading that lists:

  • Account or invoice number(s)
  • Amount due
  • Nature of service/product (oil delivery, insurance deductible, building materials delivered to job site)
  • Due date

A bold heading immediately highlights the nature and purpose of the letter.

Step Two: Use “friendly reminder” language. For example, “Did you forget us? We have noticed that the balance listed above is now past due. We understand that this is likely an oversight on your part, and would ask that you remit payment by the due date to our office.”  

Step Three:  Include any specific information about the nature of the debt, or any personal connection you have with the customer. Example: “We made an emergency call to your home because you had no heating oil in the tank“, “Our staff worked overtime to fulfill your rush order“. This is a good place to use just a little bit of a guilt trip.  Remind the customer that they asked for the service, and that you provided it with the expectation of being paid for it. 

Step Four: Offer payment options available. Example: “Please send your payment in the enclosed envelope or call our office to make payment by Visa or MasterCard. If you are unable to pay the entire amount at once, please call our office to discuss an affordable payment arrangement”. 

Step Five: Restate the due date for payment, and let the customer know that you are willing to take further action if the bill remains unpaid. DO NOT THREATEN! Example: “Once again, we ask that you remit payment by the _______ to avoid further collection activity”

That’s it! Pretty simple huh? We highly recommend to all our collection clients that they attempt to collect their own debt first, and we love hearing stories about how they have been able to bring in some of the past due balances themselves by simply sending customers a demand letter.

Consider sending your collection letters by certified mail. It does provide a sense of urgency, and if you get a return receipt you will know and can prove the customer received your letter.

Along with the action of sending this letter, you should consider stopping providing the product of service. Some medical and legal professionals cannot simply stop, but if you can stop, it sends a much clearer message.

Do you have examples of collection letters you would like to share? We would love to see them!

 Want a FREE Guide to Writing to a Great Collection Letter? We’ve got one!

 

 

 

 

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