569755663 collection letter

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1 | P a g e H A T C H L I N K I n c . A l l R i g h t s R e s e r v e d . 2 0 1 1

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TOPIC TITLE:COLLECTION LETTER

OBJECTIVES:At the end of this lesson, you will be able to:

1. Learn the important functions of the Collection Letter.

2. Set the correct tone, when writing the first, second, third payment reminders.

3. Differentiate between a payment reminder and a final overdue notice.

Collection letters are normally sent out to customers to remind them

of payments due for goods or services delivered or rendered by a

company.

As a courtesy to the customers companies send- first, second or third reminder lettersto request for payment, before any final or drastic action (as legal action) is taken as alast recourse to secure payment.

The most important function of the collection letter is to remind the

customer of the amount due for payment, the date when the payment

must be made and the possible consequence of not paying, as adding

non-payment interest, cancellation of credit lines or totally ending

business relationships with resort to legal action in court.


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The following are sample letters of collection letters:

A.First collection reminderOn the first notice, keep the tone of the letter cordial. Non-payment

may simply be an oversight and you don't want to offend the customer,

you just want to get paid.

The Collecting Company1234, Main StreetBoston, MA 0212303/16/2011

Mr. James Creditor 1678, 5thAvenueManhattan Square, N.Y.

Dear Mr. Creditor,

Hello.

Would you please check your records? As of we had not yet receivedyour payment. You currently have an outstanding balance of . This amountwas due on (please refer to invoice number ).

If you have already sent us your payment, please disregard this notice. If you havesimply overlooked it, please take a moment now to mail us a check. Thank you for yourprompt attention to this matter.

Regards,

Jim Karter

encl:
http://www.bestsampleletters.com/business/credit-and-collections/collection/first-collection-reminder-letter.htmlhttp://www.bestsampleletters.com/business/credit-and-collections/collection/first-collection-reminder-letter.html


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B.Second collection stronger reminder

This client may be having a temporary setback and would appreciate

the opportunity to arrange a payment schedule.



Dear Mr. Creditor,

Hello.

Unfortunately, we still haven't received your payment of on invoice number dated .Because your account is past due,we .

If you are unable to pay the full amount due today, please call at to arrange a payment schedule. If you have already sent us your payment, pleasedisregard this notice. We value your patronage and appreciate your prompt attention to thismatter.

Regards,

Jim Karter

encl:
http://www.bestsampleletters.com/business/credit-and-collections/collection/second-collection-stronger-reminder-letter.htmlhttp://www.bestsampleletters.com/business/credit-and-collections/collection/second-collection-stronger-reminder-letter.htmlhttp://www.bestsampleletters.com/business/credit-and-collections/collection/second-collection-stronger-reminder-letter.htmlhttp://www.bestsampleletters.com/business/credit-and-collections/collection/second-collection-stronger-reminder-letter.html


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C.Third overdue notice

If an invoice and two previous notices have been ignored, with no

effort to make partial payment, it's time to make a stronger

statement. Point out that you regret having to take this step.



Dear Mr. Creditor,

You have failed to pay your outstanding balance of . I'm sure you do notwant to damage your credit record, but since you have failed to respond to our last twooverdue notices, or to arrange any sort of payment schedule, we are forced to.

We regret having to take this drastic action. To avoid it, please contact our officeimmediately to arrange a payment schedule.

Regards,

Jim Karter

encl:
http://www.bestsampleletters.com/business/credit-and-collections/collection/third-overdue-notice-letter.htmlhttp://www.bestsampleletters.com/business/credit-and-collections/collection/third-overdue-notice-letter.html


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D.Last chance overdue notice

This is their last chance. Prior to this you may want to try a phone call

or telegram or other attention getting device. Give them one last brief

period to respond before taking action.



Dear Mr. Creditor,

Hello.

As all of our previous attempts to contact you were unsuccessful, I regret that we are forced to.

In order to avoid this unpleasant action and further damage to your credit record, please pay thebalance of your account, , within days of the date of this letter. This is thelast notice you will receive before action is taken. Please give this matter immediate attention.

Regards,

Jim Karter

encl:
http://www.bestsampleletters.com/business/credit-and-collections/collection/last-chance-overdue-notice-letter.htmlhttp://www.bestsampleletters.com/business/credit-and-collections/collection/last-chance-overdue-notice-letter.html


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Questions:1. When was the first reminder sent? How many days after should a second

reminder be sent? How about the third reminder, how late should it be sent afterthe initial reminder is received by the creditor?

2. What may be included as enclosures in a collection letter? 3. Have you ever had collection problems in your company? What was done to

have a payment made by your customer?4. Are payment reminders effective tools in collection?5. What is a credit bureau?

569755663 collection letter

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