Sample Account Receivable Collection Letter
Collections The Right Way

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 is 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.

Five Step Collection Letter Process:

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.
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 letter, while firm, remains professional. You are no longer requesting assistance, you are putting the borrower on notice that they owe you x amount within the next x days, or else you will proceed with all avenues available to you in order to collection 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.

Receive your free sample account receivable collection letter template, PLUS many more business letter templates by requesting our Business Letter Writing Tool. Remember that you only need to download once. All of the various business letter templates are included in a single pdf file for your convenience.

TO RECEIVE THIS FREE TOOL: Subscribe to our FREE monthly newsletter. Instructions to quickly access ALL of our free leadership tools will immediately follow.

We're constantly on the lookout for free sample account receivable collection letter templates and/or other leadership tools and resources that we can recommend to our readers. Share your own helpful hints and tips here.

A FEW QUICK REMINDERS: Add "Leadership Tools and News!" BLOG: Add BLOG To Homepage: or or Be sure to bookmark this page for easy future reference. Did you find this page helpful? Please consider making a donation to help support our mission.