One of the most important aspects to owning and running a business is getting paid for the products and services you deliver to your clients. Sometimes, you’re unable to receive payment in full from the client from the beginning, especially if you’re in the medical field. Not all clients are forthcoming with payment, requiring businesses to use collection letters in an attempt to recover the missing funds.
The collection process often proves to be difficult for many business owners. Managing delinquent accounts is a tedious and time-consuming process, and it can also take time trying to track down and contact customers. As a business owner, you need to collect the money that is owed to you, but appearing to be too aggressive can sometimes hurt your company’s reputation and can even lead to lost business. Here are some things to keep in mind when writing collections letters for your business.
Be proactive
One of the best ways to ensure that you get paid on time is to send a past due letter before an account even becomes a problem. The first letter should be sent shortly after the original payment was due, and it should inquire as to whether a problem exists in regards to making the payment. People are busy, and there’s a good chance that they simply forgot about making the payment. A nicely written letter can serve as a simple reminder for someone who forgot.
Increase directness over time
If you don’t receive a response after sending your first letter, it’s okay to increase the assertiveness of you message in future letters. This will help to create a greater sense of importance without sounding like you’re harassing your client. The goal is for the first letter to be polite and helpful and for subsequent letters to be more direct.
Comply with all laws
There are laws and regulations in place regarding how aggressive you can be when it comes to collecting debt from a customer. Although these laws are primarily designed for collections agencies, these guidelines are also helpful for anyone who is in the process of trying to collect past due invoices. Any interaction you have with a customer when trying to collect debt must comply with the Fair Debt Collection Practices Act.
Send a thank you note when the payment is received
The collections process can be frustrating for businesses and embarrassing for clients or patients. Sending a thank you letter after payment has been received can help repair some of the negative feelings and add a professional touch that can help restore your business’ image among your customers.
Utilize a collection agency
If you’ve sent numerous collection letters and still haven’t heard anything, utilizing a collection agency may be beneficial. A debt collection agency has experience in collecting debts from people and will be able to collect debts faster than if you do it on your own. It may also help to introduce a collection agency at the beginning. In this instance, the debt collection agency would take care of sending collection letters to your clients, and they would be responsible for collecting past due money while you focus on your business.
Regardless of whether you choose to outsource the debt collection process or do it in-house, it’s important that you remember to follow the laws surrounding debt collection. One of the easiest ways to tarnish your business’ reputation is to harass and abuse your clients during the collections process.
