Sales just haven’t been what they were last year at this time. Frank shook his head as he pored over the aged trial balance print out, he knew he faced an uncomfortable job that was now a necessity if he wanted to stay in business. With the collection letters written by an expert guiding him he knew just what to do. “Send earlier rather than later”, the expert had commanded. Frank took his pile of past due invoices and started inputting customer information into the collection letter templates. As Frank worked his way through the pile, his confidence grew with the thought of getting paid this money that was owed to him.
Many business owners don’t send out collection letters because they don’t have any, don’t know how to write one or don’t know what to put in the letter so that they don’t alienate their customer. Collection letters should do two things: retain customer good will and help you get paid. You know a letter is working when you send out a batch of letters and your phone rings off the hook or payments start arriving in the mail. If you send out a batch of letters and there is no response- you need new letters.
The most effective letters are short, to the point and easy to read. Try to avoid long or confusing words and sentences. The more direct, the fewer misunderstandings. Your letter should:
- Tell the reason for your letter in the first sentence.
- Explain more about the first sentence in your second sentence.
- Suggest a solution.
- Thank the recipient.
Your letter is a reflection of your business, keep it professional. Remember that your letter is to persuade someone to send you money. Your wording and tone are critical, especially if this is a customer you want to continue to do business with. Always assume the customer will pay. Enclosing an envelope for payment is always a good idea. If you can include postage on the payment envelope, that is even better. The easier you make it for the customer to make the payment, the better your chances are of getting paid.
Sample First Collection Letter #1
December 2008
Franks Plumbing
123 Main Street
Anywhere, NH 05000
Account# or Invoice #: 123
Balance due or Past Due Balance: $100.00
Dear Jim,
This is a reminder that your account balance of $100.00 was overdue as of November 28, 2008.
Please pay this amount today, I have enclosed a stamped payment envelope for your convenience.
Thank you for your payment.
Sincerely,
Frank Smith
Franks Plumbing
About the author
Michelle Dunn helps companies that want to have customers that pay on time or early, she works with companies that are struggling with customers that pay late or don’t pay. Michelle has over 21 years experience in credit & debt collection, is the author of “Become the Squeaky Wheel, a credit & collections guide for everyone” and many other books and possesses a depth of knowledge and a whole tool kit of products and services that can make a big difference for your company. &