Telephone calls can sometimes prove more effective than sending out a debt collection letter, but by sending out a letter or an email can provide a clear record of your attempts to recover your debt. Also, it may sometimes prove difficult to telephone all of your customers that owe you payments if you have a large amount of companies or people to chase. Standard formatted debt collection letters can be an effective method in any credit control procedures.
A debt collection letter may be required if a customer has not paid their account within the credit terms as agreed. Before sending a payment reminder, ensure that you have taken all the steps available in credit control to try and collect the payment. This includes telephone calls, sending out statements and letters.
You should only ever send out one final chase reminder that stipulates the course of action that may be taken if payment is not received within a deadline clearly stipulated on the letter.
It is worth considering if this is the right course of action especially if you wish to continue business with this customer. You also have to be prepared to take the legal action if the balance is still not paid within the seven day period. Legal action can be taken directly through Money Claim Online if the amount is below £100,000. This is a fairly simple process but it will still take time for the customer to pay you.
There are debt collection companies which can send a debt collection letter for you and take legal action, but when they collect the money you will have to pay them a percentage of the amount collected.
Download our free debt collection letter template.
Further information on small claims can be found on the HM Courts service website.
Return from Debt Collection letter to Credit control page.