Business Debt Collection Letter Writing Secrets

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you still have not gotten a response, send a letter referring to the payment terms in the agreement you and the client originally made (you did have some kind of written agreement, even if it was just on the back of your invoice, right?).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 collection agency, along with recommended the best collection agencies.

---

The Business Failed, But Did You?

Q: After years of dreaming about starting my own business,... Read More

Multiple Clients Create Your Independent Business

Would you rather have one good client paying you five... Read More

Self-Employment: Do you know the Difference between Rates and Wages

The difference between rates and wages is not always clear... Read More

Small Business Essentials: Start Here

Thinking of starting a business on line? If so there... Read More

Franchising and Royalty Payments

If you are thinking of turning your current into a... Read More

Genius Time? It Matters

I frequently give presentations at small business gatherings, providing me... Read More

How to Effectively Design Your Business Image

In many industries, image is one of the last things... Read More

Mobile Detailing Expansion Considerations

Expanding your business requires you to take a good hard... Read More

Justice In Action

During the 1980 presidential campaign, candidate Ronald Reagan vowed, if... Read More

Starting a Pressure Washing Business

Are you thinking of starting a small pressure washer business... Read More

Small Business and Wichita

Owning a small business in Wichita, KS might not be... Read More

Pressure Washing Business and Post Fire Cleanups

Many have not experienced a fire up close. One year... Read More

Small Business Debt Collection Laws

In your small business debt collection laws will eventually become... Read More

Round Pegs In Round Holes: The Amazing Secret of Succeeding in Any Business Every Time!

Success is the desire of everyman on the face of... Read More

Politics, Environmental Rules, and Mobile Car Washes

During the California Recall Election, I was very interested. Without... Read More

Build Your Small Business by Building Relationships

-- The One Pager Shortcut Series --People do business with... Read More

Basic Psychology of Franchisee Ownership and Expansion

If you are a franchisee of a large franchise system;... Read More

What is Rule 15c211 and Reverse Merger

Rule 15C211Under SEC Rule 15C211, a U.S. securities broker or... Read More

Incorporating a Small Business: S corporations versus C corporations

If you've been considering incorporating your small business, you've probably... Read More

A Look at Small Business Incorporating in Florida

The choice to incorporate a small business in Florida has... Read More

How to Find Success in the Import Export Business

Take advantage of world politics today and start your own... Read More

Wichita Kansas is a Great Place to Run a Business

We love Wichita because it has great all round weather... Read More

Starting an Aircraft Washing Service

To wash an airplane there are many items you will... Read More

Carwash Franchisor Case Study

There are only a handful of car wash franchises in... Read More

Postcards Make It Rain Referrals

One of the simplest ways to expand your marketing efforts... Read More

Small Businesses With Work Trucks; A Warning

If you are a non-operator owner of many work trucks,... Read More

Power Tools for Business

How do we keep track of our business deals?If you... Read More

Do You Own Your Business Or Does It Own You?

What was your aim when you went into business for... Read More

Comparing Boston Area for a mobile car wash business

The Boston suburbs seem to be rich with possible locations... Read More

Professional Car Care Businesses You Can Start

If you are in the professional car care business you... Read More

But Weve Always Done It This Way

Sacred cows take a long time to die. We get... Read More

Business Scents - Do They Work?

You see it often in large shopping complexes. Customers seem... Read More

Become The Squeaky Wheel and Watch Your Business Skyrocket!

Providing high quality customer service is a must for any... Read More