Tag Archives: debt collection letters

Sample Debt Collection Letter: Increasing The Urgency

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Businessman-Balance-C2C-ResourcesAt C2C Resources, we understand that for our clients, the process of collecting a debt can feel like a balancing act.

Communication with a delinquent customer can be like delicate balancing act. You need just the right amount of friendly and the right amount of squeeze. And somewhere in the middle, there may be a need for the right amount of compromise.

At C2C Resources, we advise that the best place to start to collect a debt is by making an assumption.

Yes. You read that right. Make the assumption that a past due invoice is a simple oversight. Start with a quick and friendly reminder phone call or send a friendly reminder letter and move on to your next task.

But if you’ve sent a nice reminder (or two), made a friendly call (or two) that got you nowhere, then it’s time to fire up the heat by adding a significant consequence.

The following sample debt collection letter does just that. Here, we’ve stripped out the ‘friendly’ and added a credit hold, which for most customers, is just the right amount of heat to put that invoice at the top of the heap.

Dear _____________,

We value your business.

Because we value your business, we are concerned that your past due balance of [$$] has not been paid.

Regretfully, we must place your credit privileges with us on hold until payment is received on the outstanding balance.

We do not make these decisions lightly, however, it is important that we are fair to our business and that we require our customers honor their commitment to our credit terms.

Please give me a call if there is a problem in sending your check for the past due balance today.

Thank you for your attention to this matter.

Sincerely,

[Your name]

At C2C Resources, we’re intentional about advising our clients to begin the quest for payment by assuming the best, and increasing the heat with each communication until payment is received.

Example of a Friendly Debt Collection Letter

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Sometimes, making assumptions can get you into trouble. But there are those instances when making an assumption is a good thing to do. When it comes to debt collection notices, it’s smart for your initial contact to be built on the assumption that your customer’s late payment is simply an unintended oversight.

Crafting that first friendly collection letter built around this premise is as simple as stating the facts in a friendly tone. The following as an example:

Dear [Customer name],

Thank you for your recent business. We look forward to a continued business relationship.

I just wanted to send you a quick reminder regarding invoice number [000000] for [$0,000.00] which is now past due. If payment has not already been sent, please send your payment today in order to keep your account current.

Should you have any questions or problems regarding this invoice, please give me a call.

Thank you for your attention to this matter.

Sincerely,

[your name]

Past due invoices are serious and you certainly don’t want that fact to get lost in any fluff. Therefore, it’s in your best interest to keep the letter short, the tone friendly and the expectations clear.

Assume the best when sending your first notice. For most customers, a friendly reminder is enough to prompt the desired action.

Debt Collections Timeline: How to Stay On Track

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Schedule Collection Calls and Notices using a Collections Timeline

A solid in-house collection procedure is one that carefully schedules a series of letters and phone calls that build upon one another. Having a prescribed timeline in which to send collection letters and make phone calls will help you stay organized, fair and reasonable through the course of trying to collect. Sending too few letters or not making enough phone calls may communicate that you don’t take the matter seriously.  But too many can be just as counter productive, being perceived as harassment.

You want to find that sweet spot, sending just the right amount of reminders at the right time. This can lead to successful debt recovery.

The following is a timeline we’ve built based upon a 30-day credit term.  Of course, you’ll need to adjust the timeline to match your credit terms.

Day  
0 Invoice
35 Past due reminder letter
45 Past due follow up letter on smaller accounts or initial past due call on larger accounts. If time permits on smaller accounts, a call is better than a letter at this stage.
55 Initial past due call or follow up call depending on day 45 action
65 Termination of credit letter or choose one of the 60 day demand letters
80 Final Collection call
90 Final Demand Letter

Follow-up is a critical component to a successful collections timeline. If your client makes a promise, follow-up with a phone call if they don’t keep that promise. If you end up sending a Final Demand notice, stay true to the actions you state in it. If your letter states that you’re turning the debt over to a 3rd party collection agency, then do it.

C2C Resources helps clients with pre-formatted collection letters and call scripts through a web based recordkeeping and management software called Profit Maximizer.