A professional approach to Payment /collection followup from Accounts Receivables.
Often Finance executives are tasked with the job of receivables followup. When it comes to realising receivables followup yeilds positive results and brings the much wanted cash into your organisation.
Send a reminder letter. Once the outstanding debt has gone 30 days past due, send a professionally worded payment reminder letter to the debtor. The letter ought to address the debtor professionally and include simple language, along with payment methods. For example: After a review of our records, we have found your account is past due. This notice is a reminder your payment is due. Payment can be made via (insert methods). If you have already sent your payment, please accept our thanks and disregard this notice. Phone the debtor.
After sending a reminder notice, allow 5 to 10 business days for payment, then phone the debtor. Inquire if they have received the reminder notice and ask if they are able to make a payment. Remind them of their obligation and politely inform the debtor that interest and/or penalties (if applicable) will be incurred if payment is not received. Send a letter of demand. Sixty days after the outstanding debt goes unpaid, send a letter of demand to the account holder using Certified Mail.
The letter of demand should be straightforward and reiterate your phone conversation. State that the outstanding debt is still owed and is incurring penalties and interest (if applicable), and that the account will be turned over to a collection agency or attorney if not paid by a specific date. Hire an attorney or a debt collection company. A collection agency may "buy" the debt from you and attempt to collect from the debtor on their own. It may also charge a percentage of the money recovered from the debtor and/or a nominal fee on the amount of the debt. Another option is to retain an attorney. If the debtor is unwilling to pay the outstanding debt, an attorney can file a civil lawsuit against him.
Sample Format of letter for soft followup which may be the first letter.
Kind Attn
: Mr.
REG:
PAYMENT OF OVERDUE INVOICES
Regards,
After sending a reminder notice, allow 5 to 10 business days for payment, then phone the debtor. Inquire if they have received the reminder notice and ask if they are able to make a payment. Remind them of their obligation and politely inform the debtor that interest and/or penalties (if applicable) will be incurred if payment is not received. Send a letter of demand. Sixty days after the outstanding debt goes unpaid, send a letter of demand to the account holder using Certified Mail.
The letter of demand should be straightforward and reiterate your phone conversation. State that the outstanding debt is still owed and is incurring penalties and interest (if applicable), and that the account will be turned over to a collection agency or attorney if not paid by a specific date. Hire an attorney or a debt collection company. A collection agency may "buy" the debt from you and attempt to collect from the debtor on their own. It may also charge a percentage of the money recovered from the debtor and/or a nominal fee on the amount of the debt. Another option is to retain an attorney. If the debtor is unwilling to pay the outstanding debt, an attorney can file a civil lawsuit against him.
Sample Format of letter for soft followup which may be the first letter.
Date
:
Name
& Address
Dear
Sir
We would like to draw your kind attention towards the overdue
outstanding amounts payable to us. The total amount outstanding as on -----is ------------.The
list of outstanding invoices is enclosed for your reference.
Please arrange for the payment of the same immediately.
Your prompt attention to this matter would be highly appreciated. In case of
any queries regarding the outstanding amounts, please contact us immediately.
Please ignore this reminder, if payment has already
been made.
Thanking you in advance for your cooperation and
assuring you of our best service as always.
Regards,
