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How to write a letter for collecting money

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How to write a letter for collecting money
August 22, 2019 1st Anniversary Wishes No comments

In this blog series we'll walk through the various stages of the collection process and provide a sample collection letter for each step.

Authorization letters are designed for a significant reason. They officially give authority to a particular person to carry out some action on behalf of the former. Authorization letter to claim are widely used for the official purpose to make jobs easier for everyone. For instance, if you want money to be collected on your behalf, then sending an authorization letter it very important for smooth processing. Simple authorization letter is a very short and sweet one which includes the authority that is been passed on. Letter of authorization to act on behalf of a company or authorization letter to represent on behalf of company are few very common types.

We bring for you sample Authorization letter. Use this Authorization letter format to create your personalized letter. This company authorization letter for employee sample is a short and professionally drafted letter to use.

Sample Authorization Letter to Collect Money on Company’s Behalf

From,

Edward Smith
409, Richard Street
New York

Date: 5.09.18

To,

The Manager
ADDL Bank
New York

Dear Sir,

I, Edward Smith, maintain a CC account with your esteem bank for my company M/s Smith Enterprises. I have to make an urgent withdrawal of $ 15,000 but I am not present in town to make the withdrawal of a high value. Therefore, on my behalf, I have authorized Mr. John Brown, my manager, to collect this money in person from the bank. He will be bearing the cheque dated and signed by me.

Here are my bank details for your reference:

Bank Account Number: 011303123456
Account Name: Smith Enterprises

In case of any query, please feel free to reach me at 9898989898.

Thanking in anticipation

Regards,
Edward Smith

Given Below are a few Sample Authorization letter for a clearer Idea.

Authorization Letter to Collect Documents
Authorization Letters are very important letters designed for official communication.

Travel Authorization Letter
Travel authorization letter is to be written by person who gives permission to some other person to carry his/her belongings, valuables or to travel with his/her minor child/children.

Third Party Authorization Letter
Third party authorization letter is a formally written document stating that an individual/company is authorized by the appropriate individual/party/authority/company to undertake a certain action with permission.

Tender Authorization Letter
Tender authorization letter is an important business letter addressed to the governing and administrative body of the tenders.

Distributor Authorization Letter
Distribution authorization letter is a formal letter addressed by a manufacturer, company or organization to provide distribution rights of its material to some other company.

Parental Authorization Letter
Parental authorization letter is a notarized letter from the real parents to given authorization to the non-parent to support the child.

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Use this a sample collection letter and collection tips to build relationships confidence grew with the thought of getting paid this money that was owed to him .

How to Write a Formal Demand Letter

how to write a letter for collecting money

Last post, we looked at the basics of writing a collection letter to a client who is slow to pay. Today, let’s look at a sample letter. Please read the previous post so you will be able to relate the following words to the principles we discussed. As a quick review, they were:

1. Communicate The Issue.

3. Show Gratitude.

4. Have a “Call to Action.”

5. Allow Them to “Save Face.”

Dear Pat,

Thank you for your business. Aside from having an excellent product, you and your team embody the type of values based on a high degree of integrity.

It’s an honor and pleasure for me to serve your ______ needs. As you know, our goal is to provide the ultimate customer experience and I sincerely hope that you feel that we deliver more in “use value” to you than we take in payment. If that is ever not the case, I hope you will let me know directly and personally.

Pat, the payment of $675.00 for the latest project we did for you (invoice #5791-A, dated 1/13/11) is past due and it would mean a lot to me if you would have a check sent to us today. That way, we can continue to feel good about providing you and your excellent company with timely, value-based service.

Of course, if there is a problem I am not aware of, please call me right away at 555-1212 so we can discuss and determine the proper steps.

Again, thank you for your business, and best regards,

Don B.S. Mee

Call Pat the next day to follow up. You may not have to. You might just receive an immediate email of apology with a promise that it is being sent out today…and it will be.

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How to Write a Letter for Collecting Money

how to write a letter for collecting money

A demand letter is a letter that explains why a person or company owes you money and formally requests that they pay it to you. A demand letter may also be referred to as a debt collection letter.

You might need to write such a demand letter to a service person or company, such as a contractor, who took your money and then didn't do the work promised. You might also need to send a demand letter to someone who has sold you a defective product and will not accept a return. Or perhaps your small business has provided a service and a client is refusing to pay you, so you need to collect what you're owed.

Importance of a Demand Letter

Writing a demand letter is an important first step in legally attempting to collect money owed to you. Writing and sending the letter provides proof that you have notified the other person of this outstanding debt and have requested payment.

If you skip this step and go right to court, then the person you are seeking to collect from could claim not to have any knowledge that you're trying to collect the money. In many cases, simply writing the demand letter lets the debtor know you're serious about collecting and they will pay without your having to go to court.

What to Include in a Demand Letter

Make sure you type your demand letter so that it is easy to read. Keep your tone polite, straightforward, and businesslike. Include the following details:

  • The date the letter is being sent
  • Your name and address, and the name and address of the debtor
  • A description of the facts of the case (such as, you signed a contract for a new roof dated X date and the contractor didn't do the work)
  • The amount you are seeking to collect (see below)
  • A date by which you are requesting payment (two weeks is normally a good time frame) and a statement that, if you do not receive payment, you will pursue legal action
  • Your signature

Specific to the amount you are seeking to collect, at a minimum, this is the amount of the debt, but you can ask for more if you have had expenses caused by this (and if so, be sure to detail how this additional amount has arisen). Asking for more money creates room for negotiation, but be aware that it might also mean the debtor will simply refuse to pay anything.

Keep several copies of the demand letter and send it certified mail, return receipt requested so you can have proof it was received by the debtor. You can write a debt collection letter yourself or you can hire an attorney to write one for you. Another option is to use an online service provider to help ensure you address all the necessary points.

10-Day Demand Letter

A 10-day demand letter is a type of demand letter that is sent out by a collection agency on behalf of the person or company who is owed the money. It's basically the same as a demand letter, except that it states that if payment is not made within 10 days, the debt will be handled by the collection agency. Generally, collection agencies charge no fee to the person owed the debt (the person hiring the collection agency) if the debtor pays within this 10-day period. If not, then it becomes a collections matter and the agency will pursue the debt and charge fees for their work.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) applies to debt collectors who attempt to collect a debt. If you as a consumer receive a demand letter from an attorney or debt collection agency, it must comply with this law, which requires that the notice must state it is an attempt to collect a debt and any information obtained will be used for that purpose. As an individual or company, if you seek to collect a debt owed to you personally, you are not required to comply with this law.

A demand letter is the first formal step in collecting a debt. It clearly lays out the amount owed and the circumstances that led to it. Sending a debt collection letter makes it clear that you are serious about collecting on the debt.

I need a format for writing a letter to principal for requesting duplicate fee receipt? Having and overdue invoice template on hand will make collecting money.

Chasing payment using a letter before action

how to write a letter for collecting money

When it comes to managing accounts receivable, communication with your customers is of critical importance and a collection letter is a major part of this communication strategy. The first collection letter should be sent to your customer as soon as the invoice in question has gone past due. As time goes on and invoices continue to go unpaid, your collection letters will change – you don’t want to send the same message to a customer who is 10 days past due as you would to someone who is 90 days past due – so it’s important to set the tone and timing of your collection letter carefully. In this blog series we’ll walk through the various stages of the collection process and provide a sample collection letter for each step.

First Collection Letter- Past Due Notification

Remember- this is not your first attempt to contact the customer about the invoice in question. Earlier attempts would have been via phone and email, reminding the customer about an upcoming due date and notifying them the day the invoice became past due. This collection letter should be sent as soon as the payment goes past due. This first collection letter should include important points, such as:

  • Days past due
  • Amount due
  • Note previous attempts to collect
  • Summary of account
  • Instructions- what would you like them to do next?
  • Due date for payment- it is important to use an actually date, not “in the next 7 business days” as this can be vauge
  • Your contact information

Dig Deeper: How to Develop Killer A/R Collection Letters, Call Scripts, and Email Templates

First Collection Letter Sample:

Dear Mr. Smith,

This is just a friendly reminder that your account is past due. According to our records your balance of $573.25 is currently X days past due. We have emailed a detailed copy of your account statements. In the event you have not received these messages and documents, we have provided a summary of your account below.

  • Invoice number: 12345
  • Invoice Date: 08/15/16
  • Amount: $573.25
  • Due Date: 10/15/16
  • Days past due: 03

We would much appreciate if you could let us know the status of this payment. Please contact us or send your payment of $573.25 to the address below by April 16, 2015 if you have not already done so.

XYZ Company
ATTN: Accounting Dept.
111 Main Street
Chardon, Ohio
44024

If there is some error or you are unable to pay at this time, please contact me at 440-222-2324 x123 so we can correct any errors or arrange for another payment plan. Thank you for your prompt response to this request and for your continued business.

Sincerely,
Jeanne Lee
XYZ Company
440-222-2324 x123

As you can see, this letter is written with the intent to get paid, but not at the expense of the customer relationship. Invoices go past due for many reasons, so you don’t want to jump to conclusions and start off with a harsh letter that may damage the relationship.

If the invoice continues to go unpaid, a collector should try again to call the customer and a second collection letter should be sent. The second letter will increase the pressure but must remain professional, a tough balancing act.

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In this blog series we'll walk through the various stages of the collection process and provide a sample collection letter for each step.

how to write a letter for collecting money
Written by Mazukasa
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