- October 6, 2015
- Posted by: Taurus Collections
- Category: Uncategorized
The most important part of debt collection for your business is the pre-emptive stage. This is calling, chasing and generally making your customer aware, in a firm but fair manner, that their account is overdue.
This is where overdue account letters are critical to your processes. Your credit control department should spend a long time crafting overdue account letters templates, because if these are worded weakly, this will reflect in your collection rates, and ultimately impact your cashflow.
Here are 3 tips you can implement today in your overdue account letters to start improving your company cashflow:
• Be serious & state facts– ensure that there is an escalation process that you have followed. So when they receive the 1st overdue account letters, you make reference to the fact that you are disappointed not to have received payment, and state exactly how many days overdue the invoice is.
• Recover costs – use this as a bargaining tool. All companies have the legal right to charge interest on overdue account letters. The rate is currently 8.5% and Late Payment Charges are also recoverable. This should be in bold, in a box, at the bottom of all your collection letters.
• Make the threat real – always mention in your overdue account letters, that continued delay will result in the account being placed on stop and being passed to a 3rd party for collection. The fact that you have stated it, often is enough for customers to pay quickly, once they realise the reality of the situation.
The above tips should go a long way to making your overdue account letters more effective at collecting debts from you late paying customers.
Remember, processes are crucial to getting paid on time, and gradually increase the seriousness of the situation by using more threatening language in your overdue account letters.
For help with any late-payers email us firstname.lastname@example.org or call 01332 565 350 today for a no obligation chat about how we can help you improve your cashflow.