Here we've collected some insanely useful email templates for collecting In the grand scheme of things, it's not a lot of money, but actually I think that this is.
Last post, we looked at the basics of writing a collection letter to a client who is slow to pay. Today, let’s look at a sample letter. Please read the previous post so you will be able to relate the following words to the principles we discussed. As a quick review, they were:
1. Communicate The Issue.
3. Show Gratitude.
4. Have a “Call to Action.”
5. Allow Them to “Save Face.”
Thank you for your business. Aside from having an excellent product, you and your team embody the type of values based on a high degree of integrity.
It’s an honor and pleasure for me to serve your ______ needs. As you know, our goal is to provide the ultimate customer experience and I sincerely hope that you feel that we deliver more in “use value” to you than we take in payment. If that is ever not the case, I hope you will let me know directly and personally.
Pat, the payment of $675.00 for the latest project we did for you (invoice #5791-A, dated 1/13/11) is past due and it would mean a lot to me if you would have a check sent to us today. That way, we can continue to feel good about providing you and your excellent company with timely, value-based service.
Of course, if there is a problem I am not aware of, please call me right away at 555-1212 so we can discuss and determine the proper steps.
Again, thank you for your business, and best regards,
Don B.S. Mee
Call Pat the next day to follow up. You may not have to. You might just receive an immediate email of apology with a promise that it is being sent out today…and it will be.
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Late payment letter templates for chasing payment of overdue invoices Use our CreditXS online debt collection service and add interest and our Before sending this letter, you should check whether the company that owes you money is.
Most accounts receivable professionals barely have time to make all the phone calls necessary and send out every email, let alone make an individualized collection letter for every step of the collections process. However, following up every few weeks with a personalized letter requesting action from a non-paying customer truly helps to collect payment on time. Since every subsequent collection letter should change in tone and consequences of non-payment, we’ve created ready-to-use collection letter templates. Read on below to find out what every letter should say in order to collect payment as soon as possible.
Just because this is the first collection letter, this doesn’t mean this is your first point on contact with the customer. By now you have sent the invoice, sent due date reminders and let them know when the invoice has gone past due. The first collection letter should be sent out to the non-paying customer as soon as the invoice has gone past due.
Since this is only the first letter, it is important to keep the tone friendly, informative and professional. There are many reasons why the customer has not paid on time, such as never receiving the invoice or missing something important on the invoice. By giving them a chance for explanation before getting upset and pushy, you are able to keep a great customer-vendor relationship.
This first collection letter should contain the following information:
This is just a friendly reminder that your account is past due. According to our records your balance of $ is currently . We have emailed a detailed copy of your account statements. In the event you have not received these messages and documents, we have provided a summary of your account below.
We would much appreciate if you could let us know the status of this payment. Please contact us or send your payment of $[Insert Amount] to the address below by April 16, 2015 if you have not already done so.
If there is some error or you are unable to pay at this time, please contact me at so we can correct any errors or arrange for another payment plan. Thank you for your prompt response to this request and for your continued business.
The second collection letter can be a tough balancing act. While your tone needs to become more assertive since the first letter seems to have gone ignored, you still need to remain friendly towards to customer. Finding the gray area between assertive and friendly is always difficult.
The time to send the second collection letter is either two weeks after the first collection letter has gone ignored, or after a promise to pay from the first letter has gone past due.
The second collection letter should include:
At this time we have not yet received a payment in regards to nor have we gotten a response to the letter sent on . Your accounts is now days past due and you owe a total of .
As a valued customer, we would like to help you quickly remit payment to avoid any actions that could damage your credit rating or future credit limits with our company. If there is any reason you are unable to pay in full, please contact me at and I would be happy to talk about arranging a payment schedule that is mutually agreeable.
Please get in touch with me immediately if you would like to work out a payment schedule, otherwise please submit your payment of by . We can accept your credit card information over the phone, through our online payment portal, or I have enclosed a self-addressed envelope for your convenience should you choose to send a check in the mail.
Thank you in advance for your prompt response to this letter and for your continued business.
At this point, you have now sent multiple letters and made multiple attempts to collect. For every week that an invoice goes unpaid, the likelihood of not collecting on the full amount increases. For this reason, the tone of this letter will be very different than the rest. You will be notifying the customer that if they do not pay immediately, you will be forced to refer their account to a collections agency or involve a lawyer.
Although the third collection letter can be quite frustrating, it is important to continue to remain professional. By simply stating the facts and what the impending consequences
The third collection letter should include the following information:
At this time we still have not heard from you in regards to invoice which was due on nor have we gotten a response to the letter sent on , the letter sent on , or our numerous attempts to call and email you. Your accounts is now days past due and you owe a total of $.
I regret to inform you that unless we receive payment in full by or work out an agreed upon payment plan by this date, we will have to turn your invoice over to a collection agency and/or our attorney.
I hope to hear from you before this action must be taken to avoid damage to your credit rating or our future business relationship. Please contact me immediately at so we can get this matter settled.
With this final collection letter, you have now done everything you can and are simply letting the customer know that the matter is no longer in your hands. Although it is not mandatory to let the customer know that their account has gone into collections or turned over to a lawyer, it can help to keep the relationship in good standing and make a smooth transition. This also gives you a last final attempt to collect, and when lawyers are involved, people usually start to hustle.
This letter is significantly shorter than the others because it is simply a notification letter. It will serve as proof of the multiple times the customer was contacted, the invoice in question and the amount that is due. Remember: even as the final notice, you still must remain professional.
At this time we still have not heard from you in regards to invoice for $ which was due on . Nor have we gotten a response to numerous phone calls, emails, or the letters sent on , , or .
Because we have failed in our attempt to work this out with you directly, I regret to inform you that we have reported this issue to the credit bureau and turned this invoice over to a collection agency who will be in contact with you in regard to the payment of this invoice.
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A Demand for Payment is a formal, written document detailing a debt owed. This document also outlines how a debt should be paid, and the consequences if it isn’t repaid by a certain date.
In many jurisdictions, when first recovering a debt, parties first try to recover it through means other than small claims court or a lawsuit. Think of a demand for payment letter as an initial, non-confrontational approach to recovering a debt. It usually includes the following elements:
Demands for payment should strike a balance between including sufficient information to understand the facts of the debt, and conciseness. After all, detailing every little inconsequential fact and circumstance surrounding the debt will likely do nothing but muddle the claim.
As a reference, people often refer to this letter by other names:
The sample demand for payment letter below details a request by ‘Randy Dryer’ to ‘Emilio Martinez’ for rent payment that is past due. The letter informs Emilio Martinez what late fees he owes, as well as how many days he has before Randy Dryer pursues legal action.Demand for Payment
Be sure to send a demand for payment using a method that allows you to obtain proof of receipt. This can be return service requested, certified mail, or through a signature program offered by a private delivery service.
Demand for payment letters should be used in any circumstance where someone owes you money. Remember, every situation is fact specific and should be approached differently.
For example, if you are a building contractor and have completed work as agreed, you shouldn’t send a demand for payment on the date the work is completed. At that point, a professionalinvoice will do. However, if you aren’t paid within the time stated in the agreement, a demand for payment becomes appropriate.
Similarly, if you were charged for a service that wasn’t provided, or a product that wasn’t delivered, you are entitled to a refund. There is no need to send a demand for payment when a simple phone call will suffice. Typically, when companies accidentally charge you, a phone call will rectify the situation.
However, if you have contacted the company and explained the situation, and they have indicated they will fix it, but haven’t done so in a reasonable amount of time, a demand for payment may be appropriate. Also, if a company refuses to credit your account and you believe it is appropriate that you be credited, a demand for payment may be in order.
All in all, you should use a demand for payment letter in any case where you believe you have a legal claim regarding a debt owed.
Because your demand for payment will be used in a court claim, be polite, stick to the facts, and make your expectations clear without being unreasonable or disrespectful.
There are a couple of potential consequences for not sending a demand for payment. The first, and most obvious, is you may never get paid. Consider, just as you have many things going on in your life, so too do the people that owe you money and it’s possible they simply forgot about their debt. Perhaps they assumed their spouse had paid the debt. Without sending a demand letter, you may be leaving money on the table.
Additionally, you may not be able to proceed with a lawsuit if you have not first filed a demand for payment.
When filing a lawsuit, a plaintiff is required to provide a factual basis for the claim. This factual basis is often identical to the facts listed in the demand letter. Consequently, writing a demand for payment prior to filing suit doesn’t create additional work. Rather, it reduces work, as often the letter itself will result in payment, and when it doesn’t, you have the information you need already reduced to writing.
The two most common situations for using a demand for payment are:
There are both personal and professional situations where a demand for payment might be used when someone owes you money. For example, perhaps you lent someone money. After several months, they stopped paying on the agreed terms. A demand for payment would be appropriate in this situation.
Alternatively, perhaps you provided professional services, such as designing a website or building a retaining wall. After sending your invoices, with a due date, you hear nothing. This would be a perfect situation for using a demand for payment letter.
With the use of the internet and automated payments, sometimes, messages get lost. Consequently, you may be auto-billed for a service you didn’t receive.
For example, you may subscribe to a weekly housekeeping service. If your housekeeping professional becomes ill, and doesn’t find a replacement, you may have been billed by the billing service, despite not receiving the service. A polite phone call should fix this. However, sometimes that’s not always the case. In this case, a demand for payment is appropriate.
In other cases, you may have ordered something that arrived in an unusable condition. If you belong to the fruit of the month club, you expect not only to get fruit, but also fruit that is not spoiled. Or maybe you belong to a shaving club that is supposed to send razors each month. If your fruit arrives spoiled, or razors broken, the logical first step is to contact the retailer to attempt to rectify the situation.
Such remedy could be sending you a fresh batch of fruit, or new razors, or by crediting your account. If neither occurs, and your contract has clearly outlined the expectations of both parties, a demand for payment may be appropriate.
Sometimes, requests for customer service are handled by employees who don’t have a lot of power or incentive. A demand for payment may be the first time a concern is elevated from a line customer service representative to a manager, or a member of the legal team.
There is certain fundamental information which should be included in a demand for payment letter. Such information is detailed below:
Below is sample language often included in a demand for payment letter:
|From: Cam Contractor To: Joe Blow|
Date Debt Was Incurred
|On June 15, 2017, I completed the installation of your patio.|
Details of Debt
|Our agreement was that I would install your patio for $5,000. You agreed to pay me $2500 upfront, and another $2500 upon completion. While you did, in fact, pay me $2500 up front, you have not paid me the $2500 due upon completion.|
Details of Prior Attempts to Collect the Debt
|On June 16, 2017, I sent you an invoice for the remaining balance of $2500, with a due date of July 15, 2017. On July 16, 2017, I sent you another invoice marked “Past Due – Please pay upon receipt.”|
Expectations of Payment
|I expect the balance due of $2500 to be paid within 14 days, which is August 14, 2017.|
Consequences for Non-Payment
|If I do not receive payment by August 14, 2017, I will have no choice but to file a claim in small claims court for the amount due and owing, $2500, as well as any reasonable costs allowed by law.|
Many times the people that owe you money think that you won't seriously go after them for payment. realize that you are serious about collecting the money that is due to you and To see this all in practice, here is a sample demand letter.
Whether you loaned money to someone you know or provided supplies to a customer on consignment, collecting the money owed can be a challenge. Some borrowers may purposely attempt to avoid paying the debt while others simply forget. Before you take the extreme step of filing a small claims case to attempt to retrieve your funds, try writing a simple letter to collect your money first.
Address your collection letter to the exact individual who owes the money. Do not simply address it to a company. If a business that owes the debt, address to the business owner or accounts payable department. If an individual include his full first and last name as well as his most updated address.
Identify the reason for the letter, which is an unpaid debt. List the current amount due, original amount before late fees, account number if applicable and the date the debt was due.
Write the number of days that the debt is now overdue as of the date of this letter. Include information about the history or reason for the debt so that the borrower or customer can recall the situation. For instance, if the company owes money from an invoice for the sale of computer parts, provide a full description of the items shipped, date the order was fulfilled and shipment tracking number. Enclose proof of delivery in this case.
Ask for payment of the current amount due by a certain date. If this is the final “ultimatum” collection letter, explain that this is your final communication before escalating the matter or adding additional late fees.
Provide specific directions on how the company or individual can pay the balance owed -- for instance, by credit card over the phone or by sending a check directly to your address. Date and sign the letter with your full name and company name, if applicable. Send the letter via certified mail and keep a copy for your own records to prove that you tried to contact the person directly for payment.
Writing a short formal Letter Before Action solves payment problems over the people who owe you money, and get them to do something about it. If you do not get paid, then ensure you following the correct legal procedure for collecting payment. How to Prepare an Invoice - Examples and Templates.