Skip to main content

Collection Letter

  

Collection Letter

By: Anjali Tiwari

 Introduction

The procedure of collecting payment on outstanding customer accounts is dreaded by many small business owners. In addition to the free collection letter templates, we've included best practises that you may use to reduce the possibility of having to do this on a regular basis.

Information to Include in Collection Letter

When writing a collection letter, you should strive to appear both professional and tough. You want to show your customer that you're serious about collecting payment while keeping the relationship intact.

·      Keep it short and to the point; do not use complicated language

·      Type the letter; do not handwrite it

·      Use company letterhead

·      Include a copy of the invoice(s) or a summarized statement if multiple outstanding invoices

·      Include a specific date the account should be made current (such as “payment should be made no later than April 17” as opposed to “payment should be made within seven business days”)

·      Include acceptable payment methods like check, credit card and debit card

·      Your contact information, including phone number, email address and mailing address

·      A postage-paid envelope so they can drop a check in the mail easily

 Dos and Don’ts of Writing a Collection Letter

At the end of the collection process, you want to accomplish two key objectives: get paid and retain a positive connection with the consumer. Here is a list of some of the do's and don'ts we propose when seeking to collect on a debt in order to accomplish both of these goals: 

Here is what is recommended in this situation:

·      Do keep it professional

·      Do assume that the customer will pay

·      Do attempt to call the customer before sending the first letter

·      Do send an email before you send the first letter

 

Here is what you don’t want to do in this situation:

·      Don’t use harsh words

·      Don’t harass customers

·      Don’t send text messages to customers

·      Don’t communicate via social media links

 

Types of Collection Letters

You will send your customer one of four different types of collection letters. It's important to remember that if your customer responds to your phone calls or one of your letters, there's no need to write another letter unless the client fails to pay. The first two collection letter forms are quite mild, whereas the last two use more harsh language.

(i) The First Collection Letter

Only mail the first collection letter after you've attempted to contact the customer by phone and email. You should send the first collection letter if the consumer has not made payment arrangements with you after you have contacted them by phone and email. This should be no later than 14 days after the invoice is due.

(ii) The Second Collection Letter

A phone call should be made before sending a second collection letter to see if the first letter was received and if the consumer would like to make payment arrangements. If you haven't been able to reach the consumer via phone, it's time to send the second collection letter.

The main difference between the first and second letters is that the first letter will include the fact that you attempted to contact the consumer. 

(iii) The Third Collection Letter

After you've sent the second collection letter, call the consumer to see if you can reach them. You must write a third collection letter if the customer has not made any attempt to communicate within a few weeks.

You'll include text, similar to the second letter, informing the customer that earlier attempts via letters and phone calls were ineffective, resulting in this third try. It's also a good idea to send this letter via certified mail. This will necessitate someone signing for the letter, and it will serve as verification that it was received. If you need to take legal action to recover this debt, you'll need this kind of documentation.

 (iv) The Fourth & Final Collection Letter

While exceptions may exist, by the fourth collection letter, it should be painfully obvious that your customer is either unwilling or unable to pay their debt. This letter will be the most assertive we've ever written, yet it will still be professional. This last collection letter, like the third, should be sent via certified mail.


Comments

Popular posts from this blog

Section 58B of The Advocates Act - Special provision relating to certain disciplinary proceedings

 Section 58B The Advocates Act Description (1) As from the 1st day of September, 1963, every proceeding in respect of any disciplinary matter in relation to an existing advocate of a High Court shall, save as provided in the first proviso to sub-section (2), be disposed of by the State Bar Council in relation to that High Court, as if the existing advocate had been enrolled as an advocate on its roll. (2) If immediately before the said date, there is any proceeding in respect of any disciplinary matter in relation to an existing advocate pending before any High Court under the Indian Bar Councils Act, 1926 (38 of 1926), such proceeding shall stand transferred to the State Bar Council in relation to that High Court, as if it were a proceeding pending before the corresponding Bar Council under clause (c) of sub-section (1) of section 56: Provided that where in respect of any such proceeding the High Court has received the finding of a Tribunal constituted under section 11 of the Indian B

Case Laws related to Defamation in favour of ClaimantCase Laws related to Defamation in favour of Claimant. TOLLEY Vs, J.S FRY & SONS LTD – (1931) Facts The defendants were owners of chocolate manufacturing company. They advertised their products with a caricature of the claimant, who was a prominent amateur golfer, showing him with the defendants’ chocolate in his pocket while playing golf. The advertisement compared the excellence of the chocolate to the excellence of the claimant’s drive. The claimant did not consent to or knew about the advertisement. Issue The claimant alleged that the advertisement suggested that he agreed to his portrait being used for commercial purposes and for financial gain. He further claimed that the use of his image made him look like someone who prostituted his reputation for advertising purposes and was thus unworthy of his status. At trial, several golfers gave evidence to the effect that if an amateur sold himself for advertisement, he no longer maintained his amateur status and might be asked to resign from his respective club. Furthermore, there was evidence that the possible adverse effects of the caricature on the claimant’s reputation were brought to the defendants’ attention. The trial judge found that the caricature could have a defamatory meaning. The jury then found in favor of the claimant. Held The House of Lords held that in the circumstances of this case – as explained by the facts – the caricature was capable of constituting defamation. In other words, the publication could have the meaning alleged by the claimant. The Lords also ordered a new trial limited to the assessment of damages. NEWSTEAD V LANDON EXPRESS NEWSPAPER LTD, (1939) Facts: A newspaper published a defamatory article about Harold Newstead. However, another person with this name brought an action in libel. He claimed that the article had been misunderstood as leading to him. The defendant newspaper recognised that they published the article. Also, they denied that they had the intention of being defamatory of him. Consequently, the claimant argued that the newspaper was under a duty. The duty was to give a clear and complete description of the correct person. Moreover, the claimant argued that the defendants were in breach of the duty. Issues: The issue in Newstead v London Express Newspaper, was if the reasonable persons would have understood the words complained of to refer to the plaintiff. Held: The Court of Appeal stated that in accordance with the current law on libel, liability for libel does not depend on the intention of the defamer; but on the fact of the defamation. Accordingly, a reasonable man, in this case a newspaper publisher, must be aware of the possibility of individuals with the same name and must assume that the words published will be read by a reasonable man with reasonable care.

  Case Laws related to Defamation in favour of Claimant.  TOLLEY  Vs,  J.S FRY & SONS LTD – (1931) Facts The defendants were owners of chocolate manufacturing company. They advertised their products with a caricature of the claimant, who was a prominent amateur golfer, showing him with the defendants’ chocolate in his pocket while playing golf. The advertisement compared the excellence of the chocolate to the excellence of the claimant’s drive. The claimant did not consent to or knew about the advertisement.   Issue The claimant alleged that the advertisement suggested that he agreed to his portrait being used for commercial purposes and for financial gain. He further claimed that the use of his image made him look like someone who prostituted his reputation for advertising purposes and was thus unworthy of his status. At trial, several golfers gave evidence to the effect that if an amateur sold himself for advertisement, he no longer maintained his amateur status and might be aske

Rules as to delivery of goods

                             Rules as to delivery of goods Section 2(2) of Sale of Goods Act defines ‘delivery’ as a ‘voluntary transfer of possession from one person to another.’ Thus, if the transfer of goods is not voluntary and is taken by theft, by fraud, or by force, then there is no ‘delivery. Moreover, the ‘delivery’ should have the effect of putting the goods in possession of the buyer. The essence of the delivery is a voluntary transfer of possession of goods from one person to another. There is no delivery of goods where they are obtained at pistol point or theft. 1. Mode of Delivery: According to Section 33, delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf. Delivery of goods may be actual, symbolic or constructive. 2. Expenses of Delivery: According to Section 36(5), unless otherwise agree