Late payment or debt recovery letters as they are sometimes called can be an effective way to recover debts if they are put together correctly. Here’s some advice on how to compile your own letter and what and how much to include.
Before we get started it is also worth noting that you may need more than one late payment letter if your client is digging their heels in which means each letter will need to be compiled in a different way to achieve the desired results.
The first letter should be a polite but firm reminder that a payment deadline has been missed and should include all the basic details:
Client name & Address
Date
Your company name & address
Account reference number
Original payment due date
Payment options and a reminder of terms
The letter should also include a brief outline of why you are sending the letter which will include letting the client know that the payment is late. The tone should be formal and make it clear that the request for payment is a serious one.
Before sending a letter, it might be worth sending your request by email particularly if the client is long term and the non-payment is a temporary lapse. The correct balance needs to struck between ensuring you get paid and keeping key clients on board. If your client consistently pays late then it might be worth assessing if they are worth all the extra effort.