Writing collection letters is an uncomfortable task for many managers because you have to strike a balance between gently reminding the customer of their overdue payment while still being firm enough to achieve the desired result – the settling of the late account. The secret behind writing a good collection letter is to always take a positive stance and not to automatically assume malice on the part of the customer when they are late with their payments. The tone of the letter should be professional, direct and to-the-point without being accusatory, since the implicit assumption is that the customer is willing to pay. If the initial letter fails to elicit the desired response, subsequent letters can be more firm and direct.

The initial collection letter should begin with a reminder to the recipient that they have an overdue account that they need to settle. You should mention the amount of the unpaid bill and the date by which you would like it to be settled. The letter should also state that the receiver should ignore the notice if they have already sent the payment. You may end by thanking the customer for their prompt action in resolving the problem.

If initial notices do not work, in subsequent letters you can state that you may have to take legal action for redress if the bill is not settled by the soonest possible date, or that you will cut off the service that is being provided if payment is not given by a certain date. But this should be used only as a last resort, when the customer is already several months behind with their payments.

Below is a sample of a collection letter that you can adapt for your own use.

Sample Letter

July 20, 2010

Gold Times Savings and Loan Corporation
Jacksontown, New Orleans
companyemail@server.com
www.url.com

Mr. Richard Prentiss
325 Privet Avenue
Smithville, New Orleans

Re: customer number 10-100

Dear Mr. Prentiss,

Greetings!

According to our records, you have an unpaid balance with us of $8,256.23 for the billing period June 15 to July 14, 2010. As this may be an oversight on your part, we urge you to settle your account with us by July 30 in order to avoid the inconvenience of legal action being taken against you. If you have any questions, you may contact Dean Driver at 025-314-5302.

If you have already paid your overdue balance, please ignore this notice.

Thank you for your prompt action on this matter.

Respectfully yours,

Branson Smith
Head, Collections Department
Gold Times Savings and Loan Corporation