Collections are a reality of business. And collection letters are a reality of an effective collection process. That´s an item we´re now dealing with at Guardian Medical Group — writing the collection letter as part of a multi-step AR collection process.
Collection letters come at the end of the process, a last notification and opportunity to service a seriously troubled account. At this point of the process invoices have gone unpaid, phone calls haven´t resolved the issue, and there are little options left to explore. We´re ready to write-off the debt and turn things over to a collection agency. Simply, we´ve had enough and are ready to move on.
There are several options you have as a business when things get this far along. In my next post I´ll touch on one of my favorite strategies — making a final offer to settle. But now I´d like to stay focused on the letter itself.
There are two things every collection letter needs to have — clarity and consequences.
Clarity. The collection letter is no place for subtlety. Without being rude, you need to be clear. Clear on what the situation is, what is owed, what you expect, and what will happen if the addressee fails to respond. Nothing is to be implied and $5 words should be avoided. Simple, straightforward, non-interpretive language is all you need. You need the reader to get it.
Consequences. Heeding the need for clarity, you need to convey what will happen if you don´t get the desired response within the desired timeframe. Again, there is no place for being rude, just be frank. If action isn´t taken, there will be a consequence of some sort. Whatever the consequence, clearly spell it out and follow through at the stated time.
Remember, at this point we´re at the end of the AR collection process. We´re ready to walk away from this receivable because all previous steps have failed.
Clarity and consequences"?¦what would you add as important elements of a collection letter?