How to Stay Tractable with Your Debt Collection Strategies

 

It is a letter that has a text-based reminder to inform the customer regarding his due payment. This is an official debt collection letter sent to the borrower by the organization. A basic form of it usually contains reminders, general inquires, legal warnings, and reminders which tells them about the potential legal actions that can be taken against them if they failed to do the payment. Since this is a professional notice where the tone is kept firm, the text should be used politely and the usage of casual slangs, offensive or abusive words, threats, or teasing is to be avoided at any cost because you want to retain your customers along with taking the due payment.

Since collection letters are written in a followed series, every letter compared to the previous ones consists of a change in the tone from being friendly, firm, and strict. However, even the sternest language used is still existing in the consideration of the fact that the relationship with the customer shouldn’t be ruined at any cost and you should seem friendly. Knowing the background of his customer may allow the seller to write the letter in the most appropriate manner and still receiving the payment.

The basic characteristics of these letters include mentioning the primary objective of writing, reference of the previous letters of the series, organization’s name on which the credit was issued, lender’s name, the total amount which is debt, extra costs (if any), last date of the payment of the credit debt, showing concern by asking the delay reason, and if multiple letters were sent then pointing down the possible legal actions as well.

The most basic collection letter sample consists of the following things:

  • SHOWING CONCERN: In these letters, a seller should sound concerned with the customer regarding his unsettled account.
  • THE DUE AMOUNT: The total amount which is due should be mentioned along with the payment and items of sales.
  • URGING THE CUSTOMER: You have to take a chance in influencing the customer so that he can pay the bill as soon as possible.
  • RESPECT THE CUSTOMER: No matter what, one should always respect his customer and that’s how the language should be used in the letter as well. The tone should be encouraging and helping, not threatening or hurting.
  • KNOW YOUR CUSTOMER: It is essential to know your customer while you are writing him a series of letters. Make sure you have complete knowledge about his previous dealings, credit scores, and position, goodwill, the scale of his business and type of it, current stats in the market, etc.
  • TELL ABOUT SERIES: If you have previously sent him other letters as well, make sure you are putting or each such in the current one and tell him the gravity of the situation.
  • MAKE CUSTOMER FEEL IMPORTANT: To complete the dues on time, the seller should put in some motivational paraphrases and make the customer feel important for future business.
  • STATE CLEAR THE LEGAL ACTIONS: If the customer is not budging even after the due date is way past, it is time to indicate to him about the potential legal actions which can be taken against him and consequences related to that.

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As we have talked about earlier, these series follow a series which often starts by sending the initial letter in which the current statement of the unsettled account mentioned, and after various letters, the series ends with a final letter which follows a basic collection letter format which is as follows:

  • Showing the record of previous letters
  • The opening courtesy and general information are now kept brief because it was well-repeated in the previous letters
  • The tone used is now a bit strict whereas the use of polite words is less, but the overall tone is still subtle
  • A straightforward approach towards the due payment is used along with showing disappointment regarding the delay
  • Since the series of the letter is on the verge of end, the potential legal actions are mentioned along with overdue bills
  • A final date is given after which the customer can receive a legal notice

Let’s now talk about the types of collection letters:

  1. REMINDER LETTER

This letter is written with a general reminder just in case the customer skipped the payment by mistake. Common day problems like financial or medical issues are assumed to be the reason for it and the tone used is friendly.

  1. INQUIRY LETTER

One can guess the purpose of this by reading the name, this letter is used to inquire about the reasons why the customer is delaying the payments.

  1. OFFICIAL LETTER

The official letter written by the seller suggests the customer about the potential legal actions that can be taken against him if he failed to pay the due amount in the given period. The penalties he can face include closing any further dealings with them or other legal actions mentioned clearly in the letter.

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