LETTER OF COLLECTION

Sample account receivable collection letter review: Every month business owners must take time to make the phone calls and write the letters to collect money that is past due.

Collection letters come in all forms, ranging from a polite request for payment to a blunt and quite aggressive 'Pay Or Else' demand.

When writing a collection letter consider whether it would be cost productive to offer some sort of incentive, possibly in the form of a discount for payoff, or for early payment on an ongoing basis.

State up front in the letter the original terms of payment that you both agreed to in good faith. Providing the simple facts of the agreement is a nice way to keep the letter from becoming to personal.

Invite the customer to contact you whether he can or cannot make payment. Open communication is a key factor to resolving the delinquency. This may mean that you should be open to re-writing the terms of payment plan in order to allow the borrower to make payments in the future.

Offer assistance if the borrower admits to feeling overwhelmed or is fearful of his ability to make future payments. At all times use a respectful and sincere tone. Gentle persuasion is always a more effective communication tactic than screaming a demand for payment.

If more than one collection letter is necessary, your tone shall become more firm and your requests will be more of a demand - yet the manner in which you choose your words and the spirit in which you deliver them should always remain respectful and professional. Never make it personal. Remember you simply have a job to do - nothing more, nothing less.

In your final demand letter, state clearly what the penalties and fees will be if the customer does not meet the final timeline for payment.

Make it clear to the customer that if payment is not made then you will have no choice as to forward the case on to your legal representative who will take necessary actions on behalf of your organization. Our sample account receivable collection letter template will assist you in preparing a highly effective document.

Sample Account Receivable Collection Letter Tips

Five Steps For Using The Sample Account Receivable Collection Letter Template:

1. Letter #1 - The first letter simply contain a brief notice that gently reminds the customer about their past due situation.
2. Letter #2 - The second letter is another reminder message, yet the tone is a bit more direct in nature. A direct request for payment by a certain date is appropriate at this time.

"Collecting money from others is a job suited best for those with a compassionate heart."

3. Letter #3 - The third remains cordial but no longer gives the assumption that the borrower has forgotten to pay. This letter should make reference to the two prior reminders that have been sent. At this point the letter can state possible penalties for a failure to pay. Mention how non-payment will negatively impact their credit rating.
4. Letter #4 - The tone of the fifth letter changes dramatically to more of a demand for payment. The tone of this letter, while firm, still remains professional. You are no longer requesting assistance, you are putting the borrower on notice that they owe you x amount within the next # days, or else you will proceed with all avenues available to you in order to collect the debt.
5. Letter #5 - Final Notice - The final letter in this series is short and to the point. It's important in this final notice you inform the customer of precisely what she owes, by when - and if she fails to reply within a certain timeframe how you intend to escalate the matter.

   Make sure that whatever you say you are going to do, that you are absolutely prepared to follow up. Empty threats for payment will work against you in the long run as word gets out quickly about these kinds of situations.

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