![]() |
|
![]() |
|
![]() |
|
![]() |
Debt collection letters--an overview
"Debt collection letter" in the singular may be an oxymoron, since unfortunately, one is rarely enough. You should have a series of letters to send to deadbeat clients, each one becoming a little more insistent. Here are some ideas for a five-letter series.
Don't make your first letter look like a collection letter at all. Make it a friendly note. You're more likely to get money from someone who thinks of you as a partner than a dun.
If that first letter doesn't get a response--and usually it won't--send another the next week that's more urgent and directly asks for the money. Express your concern that you have not been able to contact the client. Ask if he or she is all right, and if he or she is having any trouble paying. The next week, if you still have not gotten a response, send a letter referring to the payment terms in the agreement you and the client originally made (you did have some kind of written agreement, even if it was just on the back of your invoice, right?). Mention the effect this nonpayment is having on your cash flow, and that your business's cash flow is just as important as theirs.
Still no response by the next week? State plainly that you are asking for the money for the final time before referring it to collections. Include a copy of the entire agreement between you and the client.
If you still have not heard back from the client, and are confident that you do not simply have a problem with their contact information, call a collection agency-in fact, you may have wanted to have gotten a collection agency from step one (more on that below).
More Tips for Successful Debt Collections
Don't wait to start asking for your money.
If it's been a week since the payment deadline passed, it's been a week too long. Send out that first "reminder" letter today. Don't hesitate to send these letters as little as a week apart from each other. The longer your bill goes unpaid, the less likely it is you will ever see that money again. If you've been sending email, try sending paper.
For whatever reason, there are people who take a paper letter more seriously. There's also the real chance that your emails really are not getting through reliably, or are ending up at the bottom of an overflowing Inbox.
If you do send email, make sure it's digitally signed. A digital signature proves that you sent the email to the specific recipient. In fact, you might want to make sure all your emails to clients and prospects are digitally signed, to have solid documentation of everything you said, and everything they owe.
Unlike with regular emails, the date, time, "to" and "from" fields can't be forged, so the email has legal standing, even more than certified mail. While web-based email programs cannot send digitally signed email, there are third-party services that will let you send hundreds of digitally signed emails from a desktop email program for only a few dollars a month.
Follow up your debt collection letter with a telephone call. As any collection agency will tell you, telephone calls are useful if your debtor has ignored the collection letters. But with caller ID, Caller Blocking and voice mail - if people don't want to take your calls it is hard to reach them. This technique could be especially effective in the case of someone with whom you know will answer their own phone.
Of course, your writing skills won't go to waste: you need to make sure you have scripted what you want to say. You should take the same attitude and touch on the same points as your letter. Whatever you do, don't let yourself get sidetracked, and don't be embarrassed. They're the ones who are putting you out.
Don't know your deadbeat's telephone number? Try looking up the "Whois" record of the business's website, which usually has the owner's telephone number.
Does all this sound like too much work? If you'd rather be writing proposals than collection letters, there are small business collection agencies that will take on debts for as little as $20 each. After all, your client had enough sense to go to you rather than doing your specialty themselves. Shouldn't you have as much sense when it comes to your debt collection letters?
Steve Austin is a regular contributor to Let No Debt Remain Outstanding (http://www.let-no-debt-remain-outstanding.com/ ), a website with articles on choosing a collection agency, along with recommended the best collection agencies.
Q: After years of dreaming about starting my own business,... Read More
How a donation is different from a sponsorship and what... Read More
When should you leverage the relationship?Leveraging sometimes brings a negative... Read More
The efficiency of debt collection is the difference between a... Read More
It is essential that you fully understand how the fuel... Read More
How many "get rich schemes" have you joined? Or have... Read More
Why does research and education play an important part of... Read More
Nothing can drive a business down faster than customers who... Read More
Cash is King... That is what everyone tells us and... Read More
The Boston suburbs seem to be rich with possible locations... Read More
The FTC, Federal Trade Commission, is considering modifying the franchise... Read More
How far away is the person you need to meet?We... Read More
The Franchise Group at the Federal Trade Commission in all... Read More
Perhaps you are building a new home office or you... Read More
Thinking of starting a business on line? If so there... Read More
Your grandfather probably told you to "learn something new everyday".... Read More
I was floored! I couldn't believe what they were saying!... Read More
-- The One Pager Shortcut Series --An effective and compelling... Read More
As a specialist in getting restaurants open, it is surprising... Read More
So you want to get into the auto detailing business... Read More
The Dynamics of Daylight Savings Time changes the way we... Read More
Tammy, a skilled and gifted horticulturist, called me to discuss... Read More
Most new small businesses won't be in business this time... Read More
If you want to start a business in 2005, and... Read More
Here are some useful tips on how to select a... Read More
Manufactured and Mobile Home owners know that the weather this... Read More
You have spent considerable time pulling your business plan together,... Read More
Do you like animals? Would you like to work for... Read More
"If at first you don't succeed, then skydiving definitely isn't... Read More
You see it often in large shopping complexes. Customers seem... Read More
The revenue history is a vital piece of your power... Read More
Pity parties are nothing new. In fact, we do it... Read More
We have all seen the mobile washing units cruising our... Read More
1. TargetYou are not all things to all people. Decide... Read More
The success of your business depends on your ability to... Read More
Now that you have invested your time, energy and money... Read More
This year, some 700,000 American businesses will be sold. Most... Read More
Franchising Directory Sites-Paid Advertising, Lead Generation for FranchisingFranchising Directory Sites... Read More
You can't imagine how many people ask me how I... Read More
1. Leadership Is Learned ? While many people appear to... Read More
1. Resolve to build a consistent network system.Since referrals are... Read More
Cleaning the trailers towed by big trucks is not easy,... Read More
An observation while returning home from a seminar: Getting away... Read More
A few years ago, I visited Beijing for the first... Read More
You're a small business owner with a hot new product... Read More
Car wash businesses are unique to other businesses. In fact... Read More
Every business regardless of size needs a "Business Image Manual"... Read More
Seventy percent of US households use the web when shopping... Read More
The way you manage your money is one of the... Read More
It's Monday morning and Connie the Consultant sits in her... Read More
Small Business Small Business |