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Sample Collection Letters

Simple Alliance, Kenya Limited


Unsettled Debtor Accounts

Overdue accounts receivable could have serious ramifications on your cash flow, especially for start-up businesses. This situation derails your business vision and plans. It is in this context that debt collection letters become useful. You would not engage a collection agency before exhausting all other options.

Collection Letter

Collection letters are also referred to as demand letters. The letters are meant to persuade your overdue debtors to settle their debts.   

Basic Principles

You would not want your debt collection initiative to hit a snag owing to your error of commission or omission. To make your initiative smooth flowing, you need to abide by a numbe4r of basic guiding principles.  Some key considerations include:

  • Accurate gathering of debtor details
  • Clearly state your chosen penalty for non-payment
  • Be positive
  • Always be civil
  • Succinctness

Precise Collection of Defaulter Details

Prior to sending out the debt recovery letter, you need to gather exact particulars of your   overdue debtor. This analysis will enable you to precisely state the Amount owing. Your background search will also allow you to accurately mention the due date on the collection letter. This accuracy will eliminate the chances of misunderstandings between you and your debtor.  

Plainly Stating your Preferred Fine for Default

Within your collection letter, let your defaulting debtor know exactly what you plan to do in case they fail to honour your stated deadline. Some last choice options include:

  • Asking your lawyer to sue the defaulting debtor
  • Engaging a debt collection agency to help you resolve the accounts receivables issue 

Adopting a Positive Stance

Do not personalise the overdue account receivables issue. Rather, seek to know why your customer has not paid up. This attitude will allow you to issue a gentle reminder about the due account.  You will be giving your debtor the benefit if doubt.  

Being Brief

Your collection letter needs to be brief and to the point. Mention only the crucial facts. This increases your debtor’s likelihood to seriously read the letter.

Ensure Constant Civility

You need to avoid getting into the temptation of using defamatory or insulting language in your demand letter. Likewise, you need to avoid threatening your debtor.  These uncalled for traits are unlikely to give you the desired outcome – the settlement of the overdue account.

Handy Aid

So as to make your debt collection work more efficient, we have created three collection letter samples. The templates are in the attached MS Word file.  These sample collection letters are compatible with majority of common Word processing programs.

Why Three?

Our sample collection letters take into account the possibility that your overdue debtor may not settle their account after receiving the first letter. Consequently, we have developed a second and third template collection letter. You will notice that every successive letter uses slightly more strong words that the proceeding one.   This structure is meant to inform your debtor that you are increasingly becoming impatient with their continued non-payment.   

Your Role

Download the letters. Print them. Fill them out. Depending on the situation, mail each to your overdue debtor.  

Distinctive Features

Our sample collection letters offer you added advantages owing to their:

  • Easily customisable design
  • They are succinct and brief

Overdue debtor accounts could derail your business. This likelihood calls for your setting up of effective debt collection mechanisms. Collection letters constitute a viable option. You need to observe certain standards when drafting your collection letter. Your demand letter needs to be backed by an accurate gathering of debtor details. You also need to; clearly state your chosen penalty for non-payment, be positive, be civil, and to be Succinct. The attached collection letter samples could guide you.  The debt recovery letter espouses the traits mentioned above. Hiring a collection agency is usually the final option.

Copyright (C) 2016, Simple Alliance Kenya Limited

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