When just some of your debtors are NOT “doing the right thing” – that is, paying — or (worse yet) not even trying to — send them an email like this ….
Dear Mr and Mrs Debtor,
Invoice for: Their Company Pty Ltd
Invoice No/s: 12345
Unpaid Balance: $4,320.00
In light of the current economic circumstances, the firm has had to look very carefully at its credit policy and it has become obvious that over the last twelve months more clients than normal have been taking far longer to settle their invoices than in the past.
This has made it difficult for us to operate within normal overdraft arrangements and resulted in higher interest charges. Also, most clients’ work is carried out over a period of time, so there is often a significant time delay between incurring costs and rendering an account compounding this issue.
As a result of the above, the firm is now contacting any clients with fees that are currently 90+ days overdue (where there are no queries or exceptional circumstances) and asking them to either
• pay the overdue balance in full,
• advise when payment may be expected, or
• submit a reasonable payment offer for consideration by the Board
by the close of business of (insert date here … about 10 days after the date of your email).
We look forward to hearing from you shortly.
In February one year, we sent an email like that to selected debtors of a large Accounting firm. All of the debts were extremely old. As a direct result of that one email, 50% paid in full, 12% were written off (they were VERY old) and the majority of the rest made arrangements to pay – arrangements that the firm was happy to accept.
Some debtors didn’t respond to that email at all. I’ll post the wording of the follow up email that we sent to those in a future posting.
Points to Note
* NONE went to Debt Collectors
* NONE were sued.
* Most debtors did respond.
* The email had no “threat” in it.