How to collect accounts receivable
Accounts Receivable(AR) Collection Letters
Always send reminder and collection letters. Letters combined with calls can help speed up your collections! Trigger points for letters may be as follows:
Balance at 30 days receives a reminder letter, balance at 60 days receives a harsh collection letter and credit hold, balance at 90 days receives attorney letter and balance at 110 days turned over to collections.
The number of collection letters in a series should be kept to a minimum. Experienced commercial credit grantors have found that there is a point of diminishing returns, generally reached after the first letter goes unanswered.
Examples of accounts receivable(ar) collection letters
January X, 20XX
Dear Company A,
This is a friendly reminder that your account has a past due balance of $X.xx. Attached are the invoices we show to be unpaid; please check your records and if you find that these have already paid, please contact me at 713-555-5555.
If we do not hear from you or receive payment within 10 days from the date of this letter, your account will be put on credit hold and no further services will be provided until all overdue balances are paid in full.
Thank you for your prompt attention to this matter.
A reminder letter, signed by the ar collections representative, once a balance has reached 30 days old and a subsequent, harsher collection letter when a balance reaches 60 days can produce desired results. Should the harsh collection letter not produce results, an attorney letter may be in order as well as the services of a collection agency. Following is an example of a harsh collection letter which should be signed by the company’s controller.
February X, 20XX
Dear Company X:
We show your account has a past due balance of $X.xx. Previous attempts to collect the balance have failed and as a result, I have been forced to put your company on credit hold. Please call me immediately at 713-555-5556 to resolve the balance on your account and to avoid having this issue referred to a collection agency.