Communication with customers is the most important step in ensuring you will receive payment. People get busy and if you aren’t on their radar, they may simply forget about you, or see an easy way out of paying. Sending a collection letter, or email, is a tried and true way to get your customer’s attention if they are overdue on their payment. This communication should be sent out as soon as the invoice has gone unpaid and past the term limits.
A collection letter should not be created and drafted for each and every customer. This would take enormous amounts of time and create inconsistencies in the accounting department. A customer who is only a week overdue would not be happy to receive a collection letter similar to what was sent to a 50 day late customer. Below are the must-haves included in your first collection letter.
- Days Past due
- Amount due
- Summary of account
- Instructions to pay – via check, cash, or online payment
- Due date
- Contact Information
- Any late fees or repercussions for not paying on time
Collection Letter Template
Dear Mr. Smith,
According to our records your balance of $111.11 is currently X days past due. We have sent out X previous reminders, however, in case you haven’t received them we have included a summary below:
- Invoice Number
- Invoice Date
- Due Date
- Days past due
Please contact us with the status of this payment, if needed, or send us the full payment of $111.11 by July 6, 2015 to the address below.
ATTN: Accounting Dept.
123 Main Street
New York, New York
If you believe this was sent to you in error or are unable to pay at this time please contact me at 123-456-7890 so we can make any changes. Thank you for your continued business and loyalty.
This email is a simple communication that could be used for any customer that has gone overdue within the last 1-10 days. It is friendly and straight forward, without being threatening or forceful for payment. It also gives customers an opportunity to reach out if anything has changed on their end. This will help you to get customers to pay you faster.