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Published Articles by David Balovich

Published in: Creditworhty News
Date: 5/26/98

In the last column I provided a letter from a well known publication of collection letters and asked you to review it and make corrections. Hopefully, in doing so, you found the numerous errors and made the necessary corrections.

Communication whether verbal or written is either positive or negative. In order to be effective in collecting we must always strive to communicate positively regardless of personal feelings. The letter posted was, in my opinion, negative and the readers response would invoke the same.

I would immediately rewrite the opening to stating a fact. "We appreciate your business". I would remove "done with us in the past" because the tone indicates the present and future is questionable. I would delete the entire second paragraph. It not only makes an assumption that the reader is aware of the terms (what did the sales person represent the terms to be? Pay us when you can? Terms are a formality?) it makes the writer sound like they are picking a fight. ("our records indicate", what does the customers records indicate?)

I would simply state the terms and what they mean. "Our terms are 2/10 net 30. Payments received within 10 days of the invoice date are entitled to a 2% deduction. Otherwise, all payments are to be received on or before the 30th day from the invoice date".

The third paragraph appears to be a contradiction. This paragraph states the customer is unaware but the second paragraph began that the customer realized what the payment terms were. What is it? They are either aware or they are not. I would remove this paragraph also.

The final paragraph, the closing, needs to be rewritten simply because it is too personal. The letter would then read as follows.


We appreciate your business.

Our selling terms are 2/10 net 30. Payments received within 10 days of the invoice date are entitled to a 2% deduction. Otherwise all payments are to be received on or before the 30th day from the invoice date.

It is our desire to provide you the quality product/service you have come to expect from us. In order to continue to do so, we must receive payment for our products/services as agreed to. If you are unable to comply with our terms please contact us so we can discuss arrangements that are satisfactory to both of us.

Thank you .


We now have a letter that is concise (states the message we want to be paid promptly). It is not negative (it does not bring up what the customer has failed to do in the past). It does not provide the basis for argument (pitting our records against those of the customer) and it gives the customer the opportunity to redeem themselves without feeling admonished.

Collection letters should always be as brief as possible. The shorter the letter the better chance the customer will read it. The letter should be sent to the person who has the authority to see that what we want done will occur. It is my suggestion that letters not only be sent to the person that we deal with but a copy should always be sent to the authority. Authority is defined as follows:

Proprietorship .......Owner
Partnership .......All General Partners
Corporation ........Registered Agent
Limited Liability Company .......All Shareholders

Letters should always be positive. The purpose is to document and motivate the customer to respond. Negative letters should be left to collection agencies and attorneys. We should never allow our letter to be the "reason" for a customer to withhold payment.

The letter should be written the way we talk. It is important that the customer be able to hear us speaking the words he is reading. Think about this. How often do you come home from the office and say to your spouse or significant other "Pursuant to the conversation we were having this morning......" or "In accordance with..........". Sounds absurd would'nt you agree? How often, however, do collection letters begin with such language? When the customer reads that they immediately think "not directed to me".

Collection letters should be positive, written in plain language, ask for the money, provide for an alternative and be concise.

I wish you well.

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