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you still have not gotten a response, send a letter referring to the payment terms in the agreement you and the client originally made (you did have some kind of written agreement, even if it was just on the back of your invoice, right?).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 http://www.let-no-debt-remain-outstanding.com/, along with recommended the best collection agencies.
efficient cleaning crew Lake Forest ..How to do itPeople skim through newspapers and magazines and... Read More
Incredible as it sounds, you have a goldmine of free... Read More
Q: After years of dreaming about starting my own business,... Read More
Support is critical for your small business survival. You may... Read More
Quality control in franchising companies is paramount and all franchising... Read More
When working properly, computers enable small businesses to make big... Read More
To get approval for your small business loan application, you... Read More
How do you sponsor an event and get personal introductions... Read More
Starting and managing a small business is no fun chore,... Read More
The Federal Trade Commission decided to sit down and revamp... Read More
Running a small business requires many skills. However, to do... Read More
E-mail and Internet use are integral parts of the typical... Read More
A cluttered world of marketing communications diminishes the ordinary. The... Read More
Mobile carwashing is hard work, it is tough on the... Read More
Summer is a time for the outdoors, for that well-deserved... Read More
Every business starts with an idea or a dream. To... Read More
Has this ever happened to you... 'John, you have a... Read More
Competition in the business world is often viewed as a... Read More
When is advice free and when should you charge for... Read More
A Brilliant Marketing Idea... sounds great but what is it?... Read More
"What do you do?" It just might be one of... Read More
What was your aim when you went into business for... Read More
It is imperative to have your business legally prepared. How... Read More
The current lack of industry leaders represents an exceptional opportunity... Read More
It's the dream of every person who starts a business... Read More
green cleaning service Deerfield ..You know your prospects need what you sell. You know... Read More
-- Beyond Cold Calling, "Warm" Calling and Sending E-mails --Many... Read More
Pressure washing companies must look for customers in the retail... Read More
The Customer Analysis section of the business plan assesses the... Read More
Service Cleaning Businesses must maintain their equipment in order to... Read More
When it comes to cost, how much can you afford... Read More
Why? Because they have access to world class public relations... Read More
Do you have all the customers your business can use?The... Read More
Great question!Freeing your time is an indisputably key element in... Read More
The goals of businesses have undergone much evolution from the... Read More
When should you leverage the relationship?Leveraging sometimes brings a negative... Read More
Here are some of the questions that you need to... Read More
When is the Chamber ideal for your business?Joining a Chamber... Read More
With the massive explosion of start-ups and home businesses developing,... Read More
Are you responsible for your results?What comes to mind when... Read More
When small businesses fail, the wreckage is often assigned to... Read More
You're a small business owner with a hot new product... Read More
It is an American dream to own a business. But... Read More
Are you tired yet of all the books out there... Read More
I believe the number one reason why a business will... Read More
Over regulation of small business is so intense it is... Read More
Q. I am a former pastor who left the ministry... Read More
On Monday the Department of Corporations in California revoked franchise... Read More
There will come a time in your business where you... Read More
If you are in the pressure washing business and are... Read More
Small Business |