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Free Collection Letter For Clients Who Don't Pay

Free Collection Letter For Clients Who Don't Pay

What is a collection letter, and why do you need one?

A collection letter is a formal notice to people you do business with that they owe money (or anything else of value) on an account, and they must settle it or face legal action. A sample collection letter is like a demand letter and is useful for follow-up communications to delinquent accounts. Many people and businesses regard it as an opportunity to send a final warning and request immediate settlement before resorting to the legal process that would prove more costly in time, effort, energy, and – most of all – money.

Why are Collection Letters important?

Collection letters are important because they ensure that if a business or individual is owed money, it will not go unpaid. They also serve as legal proof of the debtor's indebtedness to the creditor in the event of future legal action. They also provide a record for historical reference should any question arise about whether or not payment was made.

What are collection letters for?

Collection letters are used when the person or company that is owed money is not willing to pay. Collection letters can be sent in situations where an individual, business, or government agency has delayed payment on a debt. The creditor may wish to settle the matter prior to pursuing legal action against the debtor. Collection letters can be used for many different reasons.

How to write a collection letter that will get results

In business, the "collection letter" is a means of notifying debtors that they must pay or else face legal action. For example, if a client delays payment on their account, the creditor might follow up with a collection letter. The letter would state the amount of money owed and provide detailed information about the delinquent account.

Collection letters are not to be confused with dunning notices or other types of notification that follow up on uncollected accounts where no payment has previously been made. Collection letters are intended to expedite collection efforts, while dunning notices may occur at any time.

If you send a collection letter and the debtor pays the amount due, do not cash the check or otherwise accept the money unless you have made an explicit agreement that payment will end further contact by your company. You can also use a collection letter to request partial payments from a debtor who owes a large sum of money to their account.

Collection letters should contain the following:

1.   Contact information: A collection letter should contain both the creditor's name and contact information, as well as the debtor's name, address, phone number, and email address.

2.    Date of the letter: Always include the date on which you are writing your collection letter. This allows both parties to refer back to this date if there is any confusion about the nature of the communication.

3.    Amount due: State precisely how much money is owed to your company.

4.    Account number: If the creditor has assigned an account number to the debtor's transaction, include it in your letter for reference purposes.

Sample of an effective collection letter

Sample 1:

"Account Information: (Account number) - (Name of the debtor)."


Dear (name of the debtor),

This letter is to inform you that your account with us has not been paid in full. We are asking for your immediate attention to this matter and would like to discuss payment options with you. If we do not hear from you within seven days, we are prepared to forward the issue to our legal affairs department. We will pursue this matter in court and work towards collecting the full sum owed to us by means of a lawsuit.


(Name) (title/position) - (company name)

Sample 2:

"Account Information:" (Account number) - (Name of debtor)"


Dear (name of the debtor),

This letter serves as a follow-up to our previous communication about your account with us. We have not heard from you and are concerned that this issue remains unresolved. Please understand that we cannot proceed with further attempts to contact you until we have received payment in full.

We hope to resolve this matter as quickly and easily as possible. If you could provide us with a detailed account for each transaction, we can make sure that your statements are accurate and correct any mistakes immediately. Our staff is prepared to work with you on the terms of payment if necessary.

Collection of this debt will become a priority if we do not hear from you within seven days. We look forward to resolving this matter privately and amicably.


(Name) (title/position) - (company name)

sample 3:

"Account Information:" (Account number) - (Name of debtor)"


Dear (name of the debtor),

It has come to our attention that you have neglected your obligation to pay for goods or services obtained from us. Please understand that this debt is being handled in accordance with the terms of the contract made between our two parties.

We have made consistent attempts to contact you and so far have heard nothing from you. We do not want this matter to proceed any further, as it would be a needless expense for both of us. Please respond to this letter within seven days, at which point we will continue with our efforts to resolve this issue privately and amicably.

We look forward to hearing from you soon. If there are any difficulties with your account, please let us know immediately.


(Name) (title/position) - (company name)

Tips on following up with delinquent clients

1. Be professional and courteous at all times. Your collection letter should not include threats or insult the debtor, even if they have taken a long time to pay you. If you receive complaints, apologize for any inconvenience caused and immediately remove their name from your accounts receivable list.

2. Ensure that the terms of your original contract are included in the collection letter. If you keep copies of all your business agreements, this will be easy to do.

3. Show that you're willing to negotiate with the debtor by including an offer such as "if we receive a payment within five days." This will indicate that you would like to resolve the issue quickly and privately.

4. Include the name, title, and phone number of a specific person who can answer questions or concerns from your clients. This will demonstrate that you take their situation seriously and want to resolve the issue as quickly as possible.

5. Save any previous communication between you and the debtor in case it's needed for legal purposes later on. If you've already tried to resolve the issue and weren't successful, you will need proof.

Why it's important to have a collections department in your business

If no one is assigned to handle customer complaints and delinquent accounts, time will be wasted responding to people who call in with trivial issues. If this happens regularly, it could mean that staff members will become increasingly stressed, and your company's overall productivity may decrease.

The collections department is not only responsible for retrieving the money owed to a business, but they can provide valuable information regarding clients and their spending habits. In some cases, this data may be used to make strategic business decisions that could result in increased revenue or improved services.

The collection department will also communicate with clients who make promises to pay the money they owe but do not follow through with their plans. This can help prevent many problems associated with unpaid invoices.


In some cases, the collection letter will resolve the issue, and your client will pay their debt as promised. In other situations, more persistent follow-up may be necessary. Whatever happens, starting with a professional collection letter is an effective way to begin dealing with delinquent accounts.

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