How do I write a debt collection letter?

No one likes writing debt collection letters, but it's something that has to be done if you want to recover the money owed to your business sooner. Here's how to go about writing a collection letter to your customers.

  • Make sure the timing is right - if an invoice is only 2-3 days overdue, don't jump on the phones immediately or start scribbling a frantic letter. At this stage, payment may still be processing and may take a couple of days to show up in your bank account. Read more  on when to send a letter or contact your debtor.
  • Once you ascertain that it's time to send out the first letter, ensure that you get the debtor's details right. There's nothing worse than getting the identity of your debtor wrong and sending sensitive information to and harrassing another person. Check that the name, address, invoice number and amount are all correct before you mail it off.
  • When it comes to wording the letter, ensure that you provide the context and reason for your contacting the debtor. You should also come across as polite and professional, yet firm. Read more on the do's and don'ts of writing early collection letters.
  • If there is still no response and the debt is now 45+ days late, you may send them another letter communicating the severity of non-payment without sounding aggressive. You can also include information about the consequences of non-payment such as legal action and accrued interest.

Also read:

Effective debt recovery

How do I select a debt collection company?

Collecting with care

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