When you have attempted to contact a delinquent customer for a while and gotten poor excuses – or no response at all – it’s time to turn to a severe letter demanding that your client take action.
The best way to deal with this situation is to have a template on-hand before the actual problem arises. This way, you can write the template letter before emotions are running high; after all, delinquency can be stressful for you and your business. Put together a template now for your Ultimate Demand Letter so you’ll have it in the future if you ever need it.
When an invoice is several months past due, your language needs to graduate from stern to severe. At this point, you have been using your dunning letter templates to communicate the amount and the due date. And if those letters have not yet made an impact, it’s essential that this one does.
This is no longer the time to use phrases like, “We would appreciate if…” or “Please send your payment…”
Start the letter strong: “This is an important letter and requires your immediate attention.”
Using words and phrases like “seriously past due,” “delinquent,” and “immediate attention” may seem harsh, but keep in mind that you didn’t put the client in this position. This is entirely their doing, and you deserve to be paid for your product or service.
In this letter, you will include the same invoice details you’ve included in the rest of your collection letter templates (invoice number, invoice date, amount past due, etc), but the letter content will differ in more than just language.
Present the consequences of continued non-payment in a list form, like this:
- We feel there is no recourse but to put your account in the hands of our collection agency.
- This action will affect your company’s credit rating.
- We may also report this to the I.R.S. as “bad debt loss” with form 1099-A if payment is not received.
A numbered list makes the information more readable than if you outlined these consequences in a paragraph form. Even if the recipient of the letter only scans the letter, the phrases “collection agency,” “your company’s credit rating,” and “bad debt” will jump out and demand action.
When an unpaid invoice has reached this point, you need to involve a collection agency. You can’t spend any more of your business’ precious time chasing down this client, and even though a collection agency will take a commission of the collected debt, it will be worth it to settle the account and put the issue to rest.
Hopefully the mere mention of your collection agency will convince the client that you mean business and will be the final push that gets the check in the mail. If not, though, you need to be willing and able to follow through on your promise in this letter.
As always, you want to give the delinquent customer a “way out” of the situation. The main purpose of this letter is to get the payment, not to express disappointment or anger.
Remember the consequences you outlined in a numbered list? Now offer the solution:
“You can avoid this by sending us a check today for the full amount due.”
It can be tough to write a letter like this dispassionately, but maintaining professionalism in collection letters is key. Use our Ultimate Reminder Letter and these guidelines to create your own template before this stressful situation arises.