As a follow up to a post I wrote about dealing with larger customers, once again Jim Logan in his Cash Flow Blog has some good suggestions for composing a good collection letter. With a FreshBooks system you can use his advice and have it sent automatically with the automated late payment reminders. Here is what he recommends having in each letter:
Clarity. The collection letter is no place for subtlety. Without being rude, you need to be clear. Clear on what the situation is, what is owed, what you expect, and what will happen if the addressee fails to respond. Nothing is to be implied and $5 words should be avoided. Simple, straightforward, non-interpretive language is all you need. You need the reader to get it.
Consequences. Heeding the need for clarity, you need to convey what will happen if you don’t get the desired response within the desired timeframe. Again, there is no place for being rude, just be frank. If action isn’t taken, there will be a consequence of some sort. Whatever the consequence, clearly spell it out and follow through at the stated time.
For any small business owner out there having trouble with their cash flow, I suggest checking out Jim’s blog, and of course getting yourself a FreshBooks system 🙂