Collection Letters

Hi:
Many small business owners are hesitant to send collection letters and/or call clients that have past due accounts. The primary reason is that they are afraid of alienating their customers. Familiarity with collection techniques can give small business owners the confidence to contact past due customers. Here are some suggestions for effective collection letters:
1) The initial letter sent to a customer should be informative but firm. When the customer reads the letter, he or she should realize that immediate payment is required, or payment arrangements made with the creditor. Stamping a bill past due, in itself, is not a successful means of collection.
2) The second collection letter sent to a customer should give a specific date by which payment needs to be received, or the business owner will take whatever actions deemed necessary to collect the account.
3) The final letter to the customer should inform the customer that their account has been turned over to a collection agency/attorney for collection.

Due to time restraints, many business owners don't contact their customers quickly enough when their accounts become past due. A customer who is experiencing hard times, will oil the squeaky wheel. When people hear that their account is past due, it's harder for them to ignore the call, than it is for them to set aside written communication. If a business doesn't have the time or inclination to make collection calls, it is wise to investigate hiring a part-time person to make the calls on behalf of the business. Tomorrow I'm going to write about different types of collection calls and what type of payment arrangements are the most successful.
Until then,
Alan