First and Second Collection Letters
Your goals are to get the debtor's attention, avoid being ignored, avoid any misunderstandings and get paid in full promptly. When it comes to recovering money on a business debt, the sooner you can get the debtor's attention the better.
- Make it clear when bill is to be paid, how much, any discounts or penalties, and, in some cases, the consequences for not paying.
- Put a "P.S." at the bottom of the statement. Much of the direct mail you receive has a P.S. at the bottom because the eye travels there more easily than to blocks or copy in the middle of the page.
- In your business, if there are predictable reasons why debtors think they don't need to pay in full, acknowledge those reasons. Otherwise resistance will persist, and you won't be paid. This approach, plus billing twice a month, cuts way down on the inevitable misunderstandings that cause a delay in payment or stops the debtor from paying altogether.
When the debtor company avoids paying their debt, well written first and second demand letters are highly recommended. These letters are designed to increase your early demand letter success rate. If your initial phone call to the debtor is unsuccessful, a well written First or Second Demand Letter will help boost your collection rate.
