A Step by Step Approach to Debt Reminder Letters

Business Insights
21/03/2018

According to data from BACS, the system responsible for bank-to-bank payments in the UK it is estimated that the average UK SME is owed £36,186 in unpaid invoices. Their research also found that 60% of SMEs have faced issues with chasing overdue payments.


Colin Ward of AVC Debt Recovery, the debt recovery specialists, offers some straightforward advice on issuing debt reminder letters.


Debt Reminder Letters – Step by Step Approach


If you consider yourself the kind of business that finds it difficult having to deal with customers or clients who have an outstanding account or an unpaid bill that needs collecting, then you are not alone. It is a fear of upsetting someone or losing a customer for daring to ask for what is yours that affects many people in business.


No one likes to risk destroying customer goodwill by having to request assertively or demand payment, but in many cases, there is no other option. Before you find yourself having to go down that route though, there are steps you can take beforehand to try to avoid the situation escalating to such a level.


Ensuring that payment due by dates and terms are clear, and indicating any late payment interest that will be applied if payment isn’t made by the date agreed, will go a long way to helping this part of your business run more smoothly.


These payment terms should be made clear in your Ts & Cs and we say to all natural salespeople who run businesses: Never be frightened to set out what your payment terms are at the point of sale.


Even these steps can’t guarantee that you won’t run into issues, and when that happens you’ll want to take an approach that is firm, but doesn’t run the risk of souring relations with a valued client or customer.


Step 1 - Keep It Friendly & Informal


The first step should be to issue a short, friendly reminder via the telephone along with another copy of the invoice. Many times an unpaid bill can be a result of the client simply forgetting. We all know that running a business is time-consuming, and it’s easy to forget what needs paying on what date. In most cases this will result in an apology and payment being made, which is the ideal outcome.


If payment isn’t made within a few days of the letter being delivered, a more direct approach may be required.


Step 2 - Be More Direct


Your second telephone call and letter should be a bit more formal, and with directness replacing the friendly tone of the first notice you sent them. At this point, the failure to pay what is owed can’t be put down to forgetfulness.


Step 3 - Introduce The Threat Of Legal Action


If payment still isn’t forthcoming, you’re going to have to get tougher, laying out a set date by which payment must be made otherwise legal action may be the result. Usually, payment within seven days is a more than reasonable demand, giving the client time to read the letter and act upon it.


Step 4 - Issue A Final Notice


If the threat of legal action hasn’t prompted payment, then you should issue a final notice demanding payment and setting a date whereby legal proceedings will be launched against them.


One piece of advice that will prove valuable is to not lose your composure or get personal when writing letters or emails. It won’t make you feel better, but will definitely lose you the customer, whereas the law is respected. So keep it professional, and to the point.


Finally


If you find the collection process draining and it is taking valuable away from your business expertise and skills as well as other customers, then the best option is going directly to a reputable debt collection company who can take the stress and hassle away from you. At AVC Debt Recovery we pride ourselves on delivering debt recovery for clients where others have failed, including solicitors.


We recognise that getting your monies into your account is what you are in business for and can deliver you and your business a speedy and satisfying result.


Remember, always act fast to collect your monies, and don’t let a late payer become a bad debt.


AVC Debt Recovery offers a number of free, no obligation services via the website,


www.avcdebtrecovery.com or via telephone, number 0333 121 0161. We deliver for clients across the UK and beyond from 2 offices in Surrey and Dorset.


AVC Debt Recovery

Debt Recovery for Business

Offices in Surrey and Dorset

Tel: 0333 121 0161

Email: info@cwlegalservices.com

website: www.avcdebtrecovery.com