Collection Letters That Work

Get the money you're owed quickly without hiring a collection agency

Nobody wants to send or receive a collection letter, but a well-crafted note can get you the money you're owed without causing undue friction with your clients and customers. Besides avoiding the cost of working with a collection agency (and the hassle and embarrassment for your customers), a good dunning letter gives clients who may have made an honest mistake a chance to put the check in the mail, but also deftly puts the heat on the deadbeats.

A successful collection letter will be:

1. Straight and to the point. Use simple language and a firm, but unthreatening, tone in a customized letter that includes invoice date, total amount due and request for full payment with a due date.
2. Short. The letter should be no longer than a page with short paragraphs.
3. Communicate the consequences of not paying immediately. Don't be rude, but make sure the customer knows what action will be taken and when if he doesn't pay up.

 

Copy then customize

Write a customized letter, but it doesn't need to be written from scratch. Check out free samples of effective dunning letters.
Try: CCH offers three professionally written letters that can be customized to meet your needs. CreditGuru.com also has free collection letters and a final notice.

Generate it from software

Software can generate dunning letters and can sometimes be linked to accounting applications you already use.
Try: Oracle users can download Oracle XML Publisher for free, which generates collection letters as well as financial statements and reports. Business Letters.com offers software that generates collection and other types of business letters.

Turn up the heat

Start with a friendly letter, then make the following ones sound increasingly pointed.
Try: Read up on Collection Letter Secrets to Getting Paid.

Educate your staff

Spread the knowledge on how to write effective collection letters and talk on the phone with delinquent customers.
Try: Right A.R.M. Consulting provides debt collection training as well as a training DVD.

 

• Flood the zone. Besides a letter, send emails and faxes. Some customers may respond better to a different media.
• Appoint a collector. Training one person to handle the deadbeats frees up the rest of the sales staff and helps ensure the collection process will be effective and professional.
• It's not you. Every business deals with late-paying customers; don't take it personally and keep it civil.
• Pull the plug. If a series of letters, emails, faxes and calls doesn't do the trick, you've done everything you can. Call a collection agency.

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