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Writing better collection letters

womancomputerhotel30420644.jpgDo you have customers that just flat out refuse to pay their bills? If you are tired of dealing with the customers that don't like to pay on time, writing credible collection letters can help you force these customers to actually pay their bills. There is some comforting news for you, a lot of small business owners do not know how to write collection letters as they aren't sure what to include in the letter. A good letter must include a few important details that will get the customers to pay and then convince them to keep ordering from your company in the future.

If you write the collection letter in the right way, you will be paid shortly after your customers receive them.If you write the letter and no one responds to them, you have most likely written the letter incorrectly and it's time to go back to the drawing board.

Tip # 1 - Send the letter soon
When you are writing collection letters for your past due customers, do not wait to send the letter. Instead you should try to send it as soon as possible in order to get your customers to pay in a timely manner. Waiting too long to send the letter may mean you will lose the interest of the customers that have already written off your invoice and they aren't going to make much of an effort to pay it.

Tip # 2 - Contact Information

Place your contact information at the top of the letter so the customers will immediately identify who is sending the letter. Here is a draft of what the letter should look like:
Company Name
Company address
Account number of past due customer
Past due balance amount that is due

Upon writing the amount they owe, you will then go into the body of the letter.

Tip # 3 - The body of the letter
The body of the letter requires attention to detail and you need to ensure you are writing it correctly. Here is what the body of the letter should look like:
"Dear Jon doe,
This is a reminder that your account balance has a balanced owed of $389.00 and was overdue as of January 1, 2011. This amount must be paid today. You can pay directly to our company at the above address or online.

Thank you for your timely payment.
Sincerely,
Jane Doe
Company Name

Tip # 4 - Short, Simple, and to the point
The collection letter will work if you keep it short, simple, and to the point. You don't want to include several paragraphs of information because a customer that already has an account balance isn't going to spend time reading that information. By telling them the amount they owe and that it is due now, you will install a sense of urgency in the customer and get them to pay their bills quickly. Just remember that you want to include 4 things in the letter:
1. The reason you are sending the letter
2. The past due amount
3. Where to pay the amount
4. Thank you for paying

Tip # 5 - Follow-up letter
After a week of non-payment, send a secondary collection letter. This letter must include information that talks about the letter you already sent. Include a second sentence that discusses the next step your company will take, such as sending the customers to a collection agency where they will be charged interest and there will be an impact on their credit.

Hopefully the customer pays you before you have to consider the option of using a collection agency. Customers that are sent to collection agencies aren't always the easiest to work with and they rarely want to work with your company in the future.

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