Small Business Debt Collection Letter Writing

by Joel Walsh

Writing a debt collection letter is one of the most important skills of any small business owner. Do you have what it takes to get the money you’ve earned?

I have a confession: I'm a business writer who's let clients get away with not paying me--a huge sign of failure of my writing abilities. You see, I never learned one of the most important writing skills for any self-employed person or small business owner: how to write a debt collection letter.

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.

1. 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.

2. 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.

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you still have not gotten a response, send a letter referring to the payment terms in the agreement you and the client originally made (you did have some kind of written agreement, even if it was just on the back of your invoice, right?).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

4. 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.

5. 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

Tip: 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.

Tip: 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.

Tip: 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?

About the author:
Joel Walsh is a regular contributor collection-agency-information.com Read all his articles on small business debt collection: http://collection-agency-information.com[Web publication requirement: use "small business debt collection" as anchor text/visible link text for http://collection-agency-information.com]

---

---

Free Wealth-Building Gifts just for Joining our Free EzMoney Bulletin

Please join our EzMoney Bulletin. It will give you the tips, tricks and secrets to turning your debt into wealth.

Just for joining you'll also receive some special wealth-building debt-busting bonuses including What You Need to Know in the Pursuit of Wealth a powerful ebook you'll be able to download instantly and read on your computer.

While here you'll also discover a variety of credit repair, debt help and wealth building tools and secrets that you can begin using today to push toward financial freedom.

E-Mail
First Name

Privacy Policy: Rest assured your email address will never be given out, rented or sold for any reason. We value your privacy. Should you ever wish to do so you can unsubscribe with one quick click in any email we send you.

Secrets to Attracting Abundance and Amassing Great Wealth

You should spend some time and read through the sites below. Just reading through the stories of success will provide you with some motivation and the knowledge that YES it is possible to make a lot of money fast...sometimes very fast. If something looks good give it a try. There are a number of money making opportunities out there. You should explore them and exploit them - Enjoy!

Do You Make $3500 a Week? She Does...
Abundant Wealth
Get the Money
This Kid is Rich
Make a Million?
You'll Love this Guy!
Robo Riches - Riches on Autopilot!

Secrets to Becoming Debt Free Quickly!

There are a number of techniques that one can use to become debt free. There are systems that once begun will have you debt free faster than you could ever have expected. If the burden of debt is weighing you down there is no time like the present for tackling your problem. Check out these debt relief solutions now.

Debt Free
The Ultimate Guide to Erasing Debt
Stop Collectors from Harrassing You
Ultimate Wealth

Credit Secrets Revealed

Many folks are oblivious to how the credit system works and how it can be used to your advantage. The sites below will give you an insiders look at the credit repair industry and just what you need to do build up a great credit rating of your own.

Credit Repair
Credit Secrets

Need a HIGH paying job?

They are out there. But you have to know what to look for. Expand your horizons and your mind. Why not make big money? Many folks work very hard for peanuts...
Jobs Directory
Make $400,000 a Year!

Home | Payday Cash | Wealth Secrets | Debt Relief | Ez Money Bulletin | Contact copyright 2006 EzMoneyAz.com