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Debt Collection Letter -v- Late Payment Reminder

If your customer is not paying their debt, it is important not to let the situation drift and to take steps to resolve the issue.

One of the main steps in the credit control process is to send a late payment reminder. This form of communication is important and can play a role when it becomes necessary to escalate to debt recovery proceedings, so it is important to make your letters effective. Here are some of the key points to remember.

Late Payment Reminder Basics in the Debt Recovery Process

A payment reminder letter is a smart place to start when it comes to getting your invoices paid. Before instructing a Debt Collection Agency to send a Debt Recovery Letter, it is typical for firms to send up to three letters requesting payment. The next stage is to issue a final notice informing your late paying client that you are about to escalate the Debt Recovery Process to a third part Debt Collection Agency.

Be clear and professional

In your late payment reminder, it is important to use professional and courteous language. At the same time, you should also clearly lay out the facts, the steps that you intend to follow, and the ways that the issue can be solved. In a payment reminder, you should stick to a professional tone and avoid anything that could be seen as hostile or combative. No matter how strong your wording is, your letter will never have the effect of a Debt Recovery Letter sent by a third-party Debt Collection Agency. This said, it is an important step to take but there’s no need for aggressive language.

Include all the information

Always include all of the relevant information associated with the late payment. It’s a good idea to include a copy of the original invoice in the letter, as well as the number of days the payment is past due. If you are unable to provide this, you may instead refer to the invoice number.

Furthermore, if the customer has signed a contract that includes terms and payment conditions, you should provide any information related to this and outline their commitment. Your letter should also provide instructions on how to make the payment.

Letter scheduling

When going through the payment reminder letter-writing process, you should seek a balance between sending too many letters and leaving long periods between letters. The best way to achieve this is with a timetable.

Depending on your industry sector, one way to organise your letters is to send the first within 7 to 14 days of the invoice due date and a follow-up letter around 7 to 14 days later. You can then send your final notice announcing how you are going to escalate the matter and that a Debt Recovery process is about to commence.

Employing a Debt Collection Agency

A professional Debt Collection Agency can help you with the whole process of written communication with your customer. We have helped businesses to recover millions of pounds worth of debt, and our Debt Collection Letter process has a different impact to the letters sent directly by our clients. We like to call it the “third party effect”. By instructing a Debt Collection Agency, you send your clients a strong message that their non-payment has momentarily interrupted the commercial relationship.

A professional Debt Collection Agency will also be able to organise a Letter Before Action at the appropriate time in the Debt Recovery process and will help you to solve the most difficult late payment situations, this, whether you are operating in the UK, Europe or the rest of the world. The Letter Before Action will often include details of specific legal steps that will be taken if the payment is not made.

Debts always get old when there is no escalation in the Debt Recovery Procedure

CLI, member of the CSA is a Debt Collection Specialist – Call us today and find out how our experienced debt collection team can help.

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