Only in our imagination does a business exist that has never had a customer who was late paying a bill. Whether or not a business offers a credit line, there is always the possibility of a bad check or unchecked credit card that denies payment. Whatever the circumstance, the problem is that a customer or client has received service but has not paid for it.

Once notified that payment is expected, most people will pay their bills and continue as customers. This majority may have failed to pay in a timely fashion because of unique circumstances or because of simple oversight. A wise policy is to initially assume that all overdue bills fall into this category. The goal should be to avoid alienating this group, while reminding them that they owe money and that payment is overdue.

A collection letter allows a customer to save face much more than a personal telephone call. In most cases, it is advised that you use a series of collection letters to request payment of the account. Each subsequent letter should get progressively firmer.

Your first collection letter should be a polite but firm reminder that payment is past due. The tone should be very positive without wavering in terms of the expected payment. For example, it might say one or more of the following:

"We hope you are enjoying your ____________."

"We enjoyed the opportunity to serve you by ____________."

"It doesn't seem possible that it was (date) when you purchased _______."

The first letter might end with a positive reminder, such as,

"Our computer generates an automatic notice when accounts are not paid within ___ days. That invoice is attached along with an envelope for your convenience in taking care of this bill. If there are extenuating circumstances associated with this unpaid account, please contact us for discussion about a schedule for payment ."

The second collection letter is more graphically worded and is sent if you have not heard from the customer within 14 days:

"We are sending this letter to remind you that your account for the _______ you purchased on (date) is past due. Please send payment at your earliest convenience."

"Our policy requires us to add a late penalty of __% to accounts that are not paid within ___ days. To avoid this charge, please send payment by (date)."

The third and final letter should be mailed just prior to sending the account out for collection by a third party. The wording is strong, but still diplomatic:

"It distresses us when a valued customer's account is overdue by ____ days. Unless we receive payment by (date), we must turn your account over to a third-party collection group. Please help us avoid this step by taking care of the matter immediately."