Collection Letter Tips

Sending collection letters has long been a necessary, but difficult process for many business owners. Not only is managing delinquent accounts a tedious and time-consuming process, but properly contacting customers can also be very difficult. You need to collect the money that is owed to you, but appearing too aggressive may sometimes hurt your company's image and possibly cause a loss in business. The following guidelines may assist you in effectively using letters to collect on past-due accounts.

  1. Be Proactive: One of the most effective methods businesses can use to increase cash flow and reduce past due payments is to send a "past-due" letter before an account truly becomes a problem. This first letter should be sent shortly after the original payment was due and merely inquire as to whether a problem exists. It's quite possible that your client may have simply missed the first statement or has forgotten about it, and a nicely written letter can provide a gentle reminder.
  2. Gradually Increase Directness: If there is no response to your first letter, gradually increase the assertiveness of your message to create a greater sense of importance. Initial correspondence is typically positive and helpful while subsequent collection letters should become more insistent in nature.
  3. Utilize a Third Party: Introducing a third party demonstrates that you are serious and willing to take extra steps to collect your money. By introducing a third party such as Transworld Systems, a reputable collection agency into the process, the customer will know that this process is being handled professionally and that all legal means will be used to collect on the past due account.
  4. Comply with the FDCPA: There are laws and regulations as to how aggressive one can get when it comes to collecting debt. While primarily designed for collection agencies, the
    guidelines are helpful in establishing professional methods for anyone to use when collecting past due invoices. For more information on the FDCPA, click here.
  5. Send a Thank You (if payment received): Since the collection process can often be a frustrating and embarrassing experience for your customers, clients, or patients, sending a thank you letter after you have received payment can help repair some of the ill-will and add a professional touch that will let your company keep its image intact.
  6. Send to a Collection Agency (if not received): After numerous collection letters have been sent, a point is reached where it becomes obvious that even more aggressive tactics will be necessary. At this time, you should consider bringing in a collection agency such as Transworld Systems to help you recover on these delinquent clients.

Transworld Systems Commercial Division provides commercial collections services for businesses in any industry. Our highly trained collectors can recover the money owed to you using sophisticated technology. We have recovered over $500 million for our clients over the past 5 years.

Our services include third party collections, skip tracing, credit scoring/reporting and litigation capabilities. We are licensed in every state that requires licensing and have a proven track record of collecting for commercial/business-to-business clients. Read more about our services.


This information is only intended as advice. Please consult with a collection agency or an A/R collections consultant for additional information.


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