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Table of Contents
Collection Letter Templates
Types of collection letter templates
If you’ve tried contacting the person but you haven’t received a response, that’s not enough to determine whether or not to send the letter. If you still think that he should pay his debt, send one of the letters below.
First collection letter
You want to send this collection letter after you’ve tried emailing or calling the customer already, which is why this is one of the last letter templates you use.
If your customers don’t reply or make the payments after you have tried to reach them, it’s time to send a first letter.
Second collection letter
Start your debt collection process by reaching out to the customers directly. Use email or phone calls to establish contact, ask regarding their payment status, and find out if they are interested in making a payment.
The second letter should be a follow-up, and you need to make sure that you reach your customer again. This time, you’ll mention that the initial letter went unanswered.
Third collection letter
Just like with any other project, one has to weigh the pros and cons of a situation. And if you have a sense that the sales cycle is frustrating your customers, then just don’t send another collection letter template.
It was my decision to send this letter, but I can see that I’ve been lax in following through with communication. This is why it appears the customer has dismissed my first two letters.
Fourth collection letter
If you come across a company that owes money to your customer, and the customer doesn’t want to pay, you might have to use more assertive language while still remaining professional.
Collection Letter Samples
Here are some of the most useful features you can expect to see in a collection letter template
It’s important to use collection letters in your business when you are owed money. Even if the debtors don’t ever contact you with an explanation, using these letters can be very effective. Here are some unique features of collection letter templates:
- Objective: The primary purpose of this type of letter is to inform your customers that they owe a debt and they’re expected to pay before the deadline.
- A reference to the previous letter: When you draft your second, third, and fourth letters to a customer, you should cite the previous letter that you sent. This will demonstrate relevance.
- A warning for legal action: The last letter should point out that you will soon take legal action unless the customer makes a payment.
- The included parties: The parties have to have a legal relationship with each other in order to deal with the matter. The relevant letter should be sent for the collection of debts.
- The commanding principle: If the client fails to pay his bills on time, then the company keeps him under its management.
- Your choice of language: You should always use a straightforward, effective, friendly, and professional language when sending your collection letters.
Debt Collection Letters
Tips for writing a collection letter template
Collection letters and past due letters help creditors and collectors to know the status of their business relationship; they guide them on how much time they have to collect debts.
They will almost always try to get in touch with the debtor via email or by phone. But if that doesn’t work, they will send a collection letter.
A collection letter is a very useful tool for businesses to use when they want to get their money back from customers who have begun to be unsatisfied with the product, but the customer has yet to return it.
Collection Letter Examples
It’s important to write these letters using a formal style. If you’re new to this, here are some tips to help you out:
Practice restraint and tact
Asking someone to pay what he doesn’t have in order to avoid consequences can be seen as a rude and arrogant thing to do.
If you want your letter to be accepted, you need to use tact and restraint in crafting it. The more you can keep the tone calm and cool, the less likely the recipient will ignore the letter.
Always use a polite tone
If you’re using difficult words or insulting language, then the customer may take it as an insult. This could make them angry and then they might decide to ignore the request.
Show the customer that you understand his problems
If your customer isn’t able to make the payment, you should be sympathetic in your letter. You should also show some sensitivity in approaching the overall collection process.
Follow the steps in the process of writing collection letter templates
In the previous section, we talked about the different types of collection letters. In some cases, a single letter isn’t enough to convince a customer to make a payment. Therefore, you need to compose a series of letters wherein:
- The first letter serves as a formal reminder.
- In this letter, stress the need to make the payment as soon as possible.
- The final letter serves as a reminder that if he doesn’t pay on time, you will be taking legal action against him.
Other tips to keep in mind
- Instead of sending a collection letter, try contacting the customer first.
- The tone you use should be firm and the content of the letter clear.
- Even though you’re going to have a collection letter, never use harsh language.
- Include the amount that you are owed, as well as when you need to be paid by.
- Establish a specific deadline so the debtor can arrange and prepare the funds for payment.
- You can pay via cash, credit card or debit cards, or check.
- Mention the consequences of not paying after the deadline you set.
- Please include your current email address, mailing address, and contact number.
- It would be very helpful if you included a postpaid envelope.
- First proofread the letter to check for any grammar or spelling mistakes.
- Rather than handwrite it, type it and print it on your company letterhead.
- Include a financial statement which shows the customers’ unpaid bills.