How to Write an Effective Collection Letter

A template for an effective collection letter is something all businesses should have at the ready, it is the first line of defense to protect your bottom line from overdue accounts receivable. The problem is many companies either do not have one or are worried that sending one will damage their relationship with their customer. By following this guide you’ll be able to write collection letters that are both effective at getting you paid and will also help in retaining your relationship with your customer.

Before we get to the sample collection letter let’s go over the key pieces of an effective collection letter:

• Amount Owing – This one is obvious and you’ll want to include it in two spots of the letter; in the body of the letter and somewhere highly visible.
• Due Date – Always include the date of when the account or invoice was due to be paid.
• Invoice or Account Number – This is for you as much as it is for your customers, it provides reference and context when communicating with your customer.
• Call to Action – This can be worded many different ways, but always has the same purpose. You want your Call to Action to appeal to your customer so they pay the overdue account in a timely manner. It’s also good practice to use this section of the collection letter to provide options for different methods of payment that you accept.
• Thank You – Thank yous go a long way in helping to recover an overdue account. While you may feel that thanking a customer who owes you money is a weird thing to include in a collection letter, what it does is show a great deal of professionalism and willingness to retain the relationship with the customer on your part.
• Your Contact Information – Make sure you include your company contact information including your mailing address, telephone number, e-mail address and website. If your customer doesn’t know how to reach you they may not bother to try.

Now that you know what should be in your collection letter it is time to create it. Below is a sample of what an effective collection letter looks like.

As you can see in the above example the key to writing an effective collection letter is to keep it to the point and professional. The balance of the account along with the invoice/account number are clearly visible just below the address and they are also in the body of the letter. It reminds the customer that this balance was past due by providing the due date and it does so by using a firm, but professional tone. The letter also includes several payment options to enhance the call to action.

There you have it, an effective collection letter that is both professional and to the point. Remember to include the amount owing, due date, invoice/account number, a call to action, and a thank you. Everything you need to write effective collection letters that will help get your overdue accounts paid and retain the relationship with your customer!

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