Writing effective final demand letter

As what I have said before in my previous columns, writing effective collection or final demand letter is a combination of art and skill. A lot of times, Credit and Collection executives are having a hard time collecting delinquent accounts because they are sending the same kind of form or standard collection letters one after the other. There is nothing wrong with this, however, if the delinquent debtor is no loner responding positively to your initial letter/s, I always suggest that a final demand letter be written specifically for the said account.

Personally, I always believe that a well-written collection letter should be focused on two objectives. First, obviously, is to collect the money that’s owed. Second, it is equally important, however, to retain customer goodwill. In cases where keeping the debtor’s business is of advantage to your company, taking care to word your letters in a way that maintains that relationship needs to be part of the strategy.

Below are some good suggestions that will assist you in making sure that your final demand letter is effective:

Gather and verify facts before you write. It is very important that you gather and verify all the facts before you begin writing your final demand letter. Review the account. Be prepared with specifics, such as: what product was purchased, how much amount was still unpaid, terms of payment, when payment was actually due, what previous collection attempts have been made, how (or did) the debtor respond. Were there any previous commitments made or broken promised made in the past?

Be specific and direct to the point. As much as possible, keep the final demand letter to one page. Use short sentences and short paragraphs. Language should be clear, direct, and easy to understand. Avoid overly formal business language that can sound condescending and distant that could create an unnecessarily adversarial tone to the letter.

Treat the debtor with equal respect. Your debtor is still your customer. Remember, while your primary goal is to get payment, you may also want to keep the customer’s business. Avoid the use of adjectives in general, especially any that could be construed as derogatory or insulting. It is imperative that whenever possible, personally sign the collection letter. This shows your regard for the customer, as well as the importance you place on the payment.

Lastly, create a sense of the urgency of payment. However, never threaten an action you are not prepared to take. Think through any ultimatum, such as a lawsuit, before including it in a collection letter. Remind the debtor of the benefits of prompt payment, such as maintaining a good credit rating, avoiding having their account put on “credit hold”, among others.

Moreover, if possible, have someone other than yourself read the letter before you finalize it and send it out. This will serve as an additional check for clarity, focus, tone and content.

For questions and inquiries call or text 0917-7220521 or email at elimtingco@ cibi.net.ph