No matter how harder a company tries, but there are times when a bill goes unpaid or a check bounces. Although the company chooses the customers very carefully, this situation is not very uncommon and happens regularly in businesses and organization. In this type of situation when a payment is at stack, the company writes a collection letter to that customer. In this letter the company demands for the money that customer owes them and keep good relations with the customer too. If this situation gets more serious, the customer might get angry and although it’s his fault, but the company’s credibility is at risk as the people will soon get to know that this is the company who sued the customer in court just for few hundred bucks. The main responsibility of the company while writing this letter, is to get the money but remind the customer that he and this relationship is more important for the company. This is a fact that you can’t do business if your customers are getting angry and leaving the company even if it’s due to their own faults. You have to keep the customer satisfied and cover the financial loses too. This is what makes it a complicated thing to write this letter and it takes a very professional person to write this type of letter.

This is not a single reason why companies write collection letters but there is another motive too. Companies who do a mutual business or agree to exchange services for long term, write this letter to inform the other company or party that the rates are increased for the products or services or the government has increased the tax ration so the other party needs to cover the difference on urgent basis if it wants to continue the business. Companies, who write this letter on regular basis, know that it’s most unlikely that a person or business responds after the first letter but you have to constantly remind them about the money they owe you and after second or third letter, you get their feedback. The first letter should be a general one in which you thank you that person for doing business with you and in a common way, you mention the money he owes you. In the second letter you use slightly hard and strong words and put a reference of the first letter too. In the third and final letter you use more serious words and ask them to make the payment or you will involve a third collection party into this situation.

General Guidelines to Write a Collection Letter:

  • Before you actually write the letter, collect all the needed information, data and figures and then compose your letter.
  • Information like the account number, holder’s name and address, the amount he owes you, the previous installments he made and if you have sent a collection letter before, add its reference number too.
  • There is no need to explain each and every point with thousands of words. You have to keep this letter concise and short and don’t exceed to one page.
  • Although that person owes you some money but that doesn’t mean you can treat him like a slave or servant. He is your debtor but still has some rights and he could sue you in the court due to insulting words you used in the letter. So be patient and polite and treat him with respect.
  • Provide him some option to make the payment such as cash, check or currency bills. This way when he has choices, it’s easier for him to make the payment.
  • Even if it’s the second or third letter, write the letter with an expectation of getting the money. This will keep you calm for a while until you heard from that person.
  • Even if that customer has stated that he is unsatisfied with the product or service you provided, he has used that product and that means you have all the rights to be paid so there is no need to lose the temper. Don’t write anything that you will regret in the future.
  • Proofread the letter after you have finished it and put your name and signature at the end.

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Sample Collection Letter

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