Probably the least pleasant part of the accounts receivable professional’s job is running a customer through a collections process. It is time-consuming and can be stressful. Truth be told, you probably are swamped just with your regular duties, emailing requests for payments and making phone calls to answer payment questions for customers.

Still, sending out personalized collections letters to the most delinquent accounts is a crucial part of getting paid. Creating every new collections letter and dunning campaign from scratch is not really necessary, however. You can work off of basic templates and personalize them as needed. To help you with this task, we’ve drafted some simple templates that are clean and easy to understand. Clarity and getting to the point quickly are critical; no one wants to read a lengthy collections letter.

Feel free to copy these templates and make them your own by modifying the introduction section and the closing section to reflect your personal relationship with the accounts payable person or your contact at the delinquent company.

Guide to Writing Collection Letter #1

In most cases, you want to send this letter out very shortly after the invoice is past due. You may have reminded the customer to pay on time, sent emails, left phone messages. Or you may have just assumed they would handle their payables on time. Because this is the first notice, keep the tone professional, but friendly. At this point, it’s more than likely that the payables contact went on vacation, your invoice is waiting in a queue, or some other minor and temporary delay has happened. With this letter, make it clear you are not assuming ill will or evasion but that you still need to have your invoice paid. Keep in mind, as well, that it is entirely possible the customer has not paid because there was a problem with the product or service that has not been resolved and the customer is unhappy. Above all, remember that paying an invoice is the last step in the customer journey and it should be if at all possible, a pleasant and positive process. These customers keep you in business.

This first collection letter must always contain the following basic information:

    • The amount due
    • The item or service purchased
  • Number of days a specific invoice is past due
  • A summary of all of the invoices on the account
  • Clear instructions on the next steps
  • Payment information – ideally an online payment link
  • A precise calendar due date upon which you are requesting payment
  • How to contact you directly with questions or to provide reasons for not paying and status updates

Collection Letter #1 Template

Dear [Insert Name],

[If you know the contact personally, insert a brief note like “Hope your vacation in Hawaii was wonderful!”]

Just a quick reminder that [Insert Company Name]’s account is past due. Our records show there is a balance of $[Insert Amount] that is currently [Insert the number of days past due] days past due. Attached is an account statement with all the relevant balance information. We have also emailed the account statement and invoice to you, for your convenience. If you have not received this email and the attachment, we have provided a summary of your account info below.

  • Invoice Number:
  • Invoice Date:
  • Amount Due Date:
  • Days Past Due:

Could you please tell me the status of your payment? Here is a [link] to our payments portal.  We request that you make payment by [Insert Date]. Alternatively, we can provide you with our bank information for an EFT or ACH.

If you can’t pay electronically, please send us a paper check to the following address:

[Insert Your Company Name]
ATTN: Accounting Dept.
[Insert Address]

If we have made an error on your account or you can’t pay at this time, please call me to discuss at [Insert Phone Number]. We are happy to correct any errors or arrange for a payment plan.

We look forward to continuing to do business with you.

Sincerely,

[Insert Your Name]

[Insert Email Address]

[Insert Phone Number]

Guide to Writing Collections Letter #2

In the second collection letter, you will need to change tone to become more firm, under the assumption that your first letter was ignored. That said, you don’t want to alienate or anger the customer. At the same time, you want to make it clear that you expect to be paid shortly. Send this second letter 7 to 10 business days after the first collection letter.

The second collection letter should include much of the same information as the letter, with the addition of a brief mention of the potential consequences of continued non-payment:

  • The amount due
  • The item or service purchased
  • Number of days a specific invoice is past due
  • A summary of all of the invoices on the account
  • Clear instructions on the next steps
  • Payment information – ideally an online payment link
  • A precise calendar due date upon which you are requesting payment
  • How to contact you directly with questions or to provide reasons for not paying and status updates
  • Brief mention that failure to pay could have real consequences (credit rating, liens filed, service suspension and reinstatement charge).

Collection Letter #2 Template

[Insert Name] – I wanted to check if you had received our first collection notice.

We have not yet received payment for [Insert Invoice Number]. We have not yet received your response to our letter sent on [Insert Date]. Unfortunately, [Insert Company Name]’s account is [Insert Days Past Due] days past due.  You owe a total of $[Insert Amount].

You are a valued customer. We would like to keep your business. Please tell us how we could help you make this payment. We would prefer to avoid actions that could damage your credit rating and impact your ability to do business with us and other companies.

Please submit your payment of $[Insert Amount] by [Insert Calendar Date]. You can pay by credit card over the phone, pay online via our payment portal, or you can send a check in the self-addressed envelope I enclosed here. If you would prefer to pay via ACH or EFT, we are happy to provide our bank details.

If for any reason you cannot pay in full, please contact me immediately at [Insert Phone Number]. I would be very happy to discuss a payment schedule for you and [Insert Company Name].

I do hope we can continue in business together. Thanks for your prompt response and payment.

Sincerely,

[Insert Your Name]

[Insert Email Address]

[Insert Phone Number]

Collection Letter Templates

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Guide to Writing Collections Letter #3

At this point, the chances of you getting a full payment are pretty slim. You have less to lose – most likely the customer has an idea of what potential consequences of non-payment might be. The tone should remain professional but less cordial to convey the severity of the situation. Definitely accompany this letter with a phone call to your contact. Make it very clear in this letter that the customer is likely to face serious consequences, including reporting the delinquency to credit bureaus and taking legal action. The third collection letter should include the following information:

  • The dates previous letters went out
  • The amount due
  • The item or service purchased
  • Number of days a specific invoice is past due
  • A summary of all of the invoices on the account
  • Clear instructions on the next steps
  • Payment information – ideally an online payment link
  • A precise calendar due date upon which you are requesting payment
  • How to contact you directly with questions or to provide reasons for not paying and status updates
  • Brief mention that failure to pay could have real consequences (credit rating, liens filed, service suspension and reinstatement charge).

Collection Letter #3 Template

Dear [Insert Name],

This is the third letter we have sent to you and [Insert Company Name] is requesting payment in full for invoice [Insert Invoice Number] which was due on [Insert Due Date]. We sent the first letter on [Insert Date] and the second letter on [Insert Date].  We have also called and emailed you to request a payment.

Your account is now [Insert Days Past Due] days past due and you owe a total of $[Insert Amount].

Unfortunately, unless we receive payment in full by [Insert Date] (or agree on a payment plan by this date), we will engage our attorney in the matter and report your delinquency to the credit bureaus. This would have severe consequences on the ability of your business to secure credit.

To prevent these consequences, you can pay the full balance (or make a partial payment immediately) via our online payments portal (URL) or call me and provide your credit card information so we can process a payment. .

Contact me immediately at [Insert Phone Number] so that we might settle this matter amicably and quickly.

Sincerely,

[Insert Your Name]

[Insert Email Address]

[Insert Phone Number]

Collections Letter #4: The Final Letter

At this point, you can honestly say you have tried your best and offered the customer multiple options to settle their invoice. This letter should not even ask for payment. Rather, it should just state that you have informed the credit bureaus and engaged your attorney or legal department to pursue legal remedies. While it is not mandatory that you notify delinquent customers of these actions, doing so might actually induce a payment. Once a company knows that legal action is imminent, then it sometimes can accelerate the settlement process. Should this final letter result in a phone call, remain cordial and even friendly; it is far better to be talking with the delinquent customer than to have them ignore all communication. You can keep this letter short. It is designed to serve as proof that a customer has been contacted multiple times and that you have made a good faith effort to give them a chance to pay their debts, in part or in full.

This letter should contain the following details:

  • Number of days an invoice is past due
  • The amount due
  • The dates when the previous three letters were sent
  • A statement that you have referred this matter to the credit bureaus and engaged an attorney

Collection Letter #4 Template

Dear [Insert Name],

We have sent three collections notices to you and [Insert Company Name] is requesting immediate payment for invoice [Insert Invoice Number] for $[Insert Amount] which was due on [Insert Due Date]. We sent letters to you on [Insert Date], [Insert Date] and [Insert Date]. We have also emailed you payment requests and copies of your invoices on those same dates.

Due to your lack of response, we have reported this issue to the credit bureaus, initiated legal action against [Insert Company Name], and are in the process of engaging a collections agency to pursue the debt.

Should there be any change in your situation, please contact me immediately at [Insert Phone Number].

Sincerely,

[Insert Your Name]

[Insert Email Address]

[Insert Phone Number]


This article by Koben Williams was originally published on Tesorio Blog

About the Author:

Koben Williams is the Head of Customer Operations at Tesorio.


Featured Image Credits: Pixabay

As you’re preparing to live overseas or travel for an extended period of time, it’s important to know how you’ll get cash. Credit cards are ubiquitous in most countries. But, there’s still the odd moment where you’ll need cash – and, depending on your destination, cash may be the only option. At the very least, taking out cash to make your daily purchases can help you stick to a budget and make sure you’re not overspending on your credit cards.

In the past, we’ve written an explanation of how foreign exchange rates work; today, here’s our guide to how to exchange foreign currency. There are many ways to trade one nation’s currency for another. Some are better than others. Stick to these rules to save money each time you exchange currency and get the best rates possible.

Don’t exchange cash before you go

There’s a lot of confusion around whether or not you should exchange cash in your home country before departing. Some travelers prefer to have at least a little cash on them when they land. But, if you’re looking for the best exchange rate, it’s better to wait until you arrive to exchange currencies. Bring the bare minimum, as overseas exchange rates are higher than getting the right currency in-country.

“Some tourists feel like they just have to have Euros or British pounds in their pockets when they step off the airplane, but they pay the price in bad stateside exchange rates. Wait until you arrive to withdraw money,” writes travel expert Rick Steves.

European Union Currency

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Avoid exchanging cash at an airport

Airport currency exchange kiosks are notoriously bad deals. “Airport currency kiosks, as well as those located near popular tourist areas, generally come with a larger exchange margin and more fees. If you changed dollars into the local currency when you landed in your destination airport, then changed your leftover foreign currency back into dollars before flying home, you’d end up losing money twice,” writes one expert.

It’s better to exchange currency at a financial institution than at an airport. There will still be a small fee for making the exchange at a bank or credit union. However, you’ll get more money for your money than if you visit a tourist rip-off.

Use an ATM to get cash

Instead of exchanging notes, get cash straight from the ATM. You’ll get a better deal, since ATMs use the current bank rate. Some banks have no foreign transaction or ATM fees, allowing you to withdraw cash in the local currency. Other banks charge ATM fees of $1 to $5, and a debit transaction fee of up to 3%. Do some research to find the card with the best rates and minimize the number of withdrawals you make from the ATM, taking out a larger sum each time, to keep charges under control. Make sure you let your bank know before you travel abroad to ensure they don’t lock your card for seemingly fraudulent charges.

Swipe your credit cards wisely

Credit cards can come in handy, especially during a big life transition like starting a new job overseas. But it’s easy to let credit card spending get out of hand – especially given the fees and charges that some credit companies take on to international purchases. As with the debit card, find a credit card that doesn’t charge any foreign transaction fees.

“Most credit cards charge a foreign transaction fee of between 1% and 3% whenever you buy something abroad, but this is still the safest and often the cheapest way to make a large purchase. You’ll almost always come out ahead on the conversion since credit cards add their fee on top of the Interbank rate,” writes one travel expert from Fodors. Set aside your credit card to use for big purchases only, and try not to take a cash advance on your credit card unless it’s an emergency.

Another good tip: pay in the currency of the country you’re in. When completing a transaction, you might be asked whether you wish to pay in USD or the local currency. Always choose the local currency. “If you pay in USD, not only will you get charged an inflated exchange rate but there is also a hidden 3-3.5% fee associated with this privilege.”

Don’t forget: exchange rates apply to money transfers

Many travelers and expats forget that exchange fees also apply to money transfers. Make sure you get the best possible deal each time you send money home to friends and family. Not all transfer methods are created equal: a transfer agent like OFX, for example, has an exchange rate markup of less than 1%, while MoneyGram can charge up to 4% on exchange rate markups.

Blockchain money transfer options are growing in popularity, mostly because this transfer doesn’t rely on banks. This means you can exchange currency at a lower cost (and faster, too!). Shop around to find the best option that won’t take advantage of an exchange rate to take your hard-earned cash.


This article was originally published on SendFriend

About SendFriend:

In the aftermath of the devastating earthquake of 2010 that hit Haiti, our founder, David, was a young analyst at the Office of the Special Envoy to Haiti at the World Bank. He witnessed firsthand the resilience and strength of the worldwide Haitian community, as Haitians around the world sent home over $2 billion to support their loved ones in their time of need.

However, as Haitians stepped up their financial support, David saw money transfer companies charging more than 7% for people to send money home.

Visits to the Philippines exposed David to the global nature of this problem. As a student at MIT, he was inspired by blockchain technology and guided toward it by professors and technologists as a potential solution to the high cost of international remittances. The result was SendFriend, an international money transfer app specifically designed for money remittance to Philippines.


Featured Image Credits: Pixabay

Managing your finances while living abroad can be challenging. Overseas workers often find their personal wealth suspended across borders, with bank accounts in different countries and income in different currencies. Taxes, transaction fees, currency conversions, and restrictions around opening a bank account are common headaches an overseas worker will likely encounter. As a result, expats working overseas need slightly different money management strategies than the average employee.

Living and working abroad can lead to better opportunities, more income, and the chance to experience new culture. Navigating wealth management comes with a whole new set of considerations. Here are some ways workers living overseas can manage and protect their money for better long-term financial health.

Open a local bank account

A local bank account can help you save money on extensive ATM fees. It’s also a good thing to have for making deposits each time you get paid. When you use a foreign card at an ATM, you’ll not only be charged by your bank but also by the local bank. That can add up quickly: some ATMs charge up to $10 each time you make a withdrawal. A local bank account is a good way to take some of the stress out of managing your cash flow while also saving on fees.

Pay attention to exchange rates 

Exchange rates can impact an overseas worker’s take home salary over time. It can also play a role in how an overseas worker budgets for living expenses.

There are two key ways in which a currency exchange rate impacts an overseas worker’s salary. The first way applies more to the employer: it’s how the exchange rate affects the final cost to the employer for an overseas assignment. The second way is the amount of money an overseas worker receives relative to their home currency and the location where they’re spending on living expenses.

When an employee is earning an income in one currency, especially over a long-term assignment, the currency conversion can actually mean they’re earning significantly less (or more!) than they would back home. For example, an American working in South Africa earning rand will face currency fluctuations when the rand value decreases or the dollar gets stronger. This means they will not have the same financial security than if they were making USD. To mitigate this risk, negotiate your salary such that the employer takes on the financial burden of changes in exchange rate (up or down), or set your salary based on your home currency.

Find a way to transfer money with low international fees

Whether you’re transferring money to family, trying to allocate funds to multiple bank accounts, paying overseas bills, or simply sending money occasionally, international fees can take a good chunk out of your income. Get the mid-market exchange rate – the midpoint between the buy and sell prices of two currencies – when you send money abroad. Avoid hidden fees, such as the exchange rate fee, that many banks add into an international transaction. And, most importantly, protect your money and accounts by only working with compliant, safe transaction providers. There are international regulations and standards against money laundering that your bank or transfer agent should adhere to each time you need to make a transaction.

Keep your credit score high 

Often, moving to a foreign country means losing your credit history. Credit histories are not portable across countries: each time a worker relocates, they will have to re-establish a credit track record. This can have a long term impact on your ability to get a mortgage, a car loan, and even get a cell phone plan.

Establishing a credit score requires historical debt repayment information. As a result, make sure to keep open a credit card from your home country and use it a few times each year. By simply ordering a few things from Amazon or another online retailer, and then paying your bills on time, you can manage to keep your credit strong while working overseas.

Budget for taxes

Taxes get even more complicated as soon as you begin working abroad. Depending on the country and the type of visa you have, you may be responsible for taxes at home and in your working country. The US is one such country where citizens are responsible for filing and paying income tax, even when they live outside the borders. For UK residents, if your business or property is situated in the UK, you will still be responsible for some UK taxes. It’s also important to know what local tax regulations require: in Argentina, for example, joint filing income tax is not an option.

You may be eligible to apply for a foreign tax credit, which can reduce your double-taxation requirements. Check if you qualify for a tax credit before you leave your home country. It also might be worthwhile to work with a local CPA or accountant to make sure you’re filing your overseas tax return accurately and taking full advantage of possible credits and deductions to save money.

Money Management

Image Credits: Pixabay

Don’t forget to plan for retirement

Between managing living expenses, sending money home, and paying your taxes, the last thing many overseas workers think about is managing their retirement fund. This can be a big mistake down the road.

Before you leave to work abroad, make sure you’re aware of how your time overseas will impact your eligibility for retirement plans both in your host country and home country. “If employment status doesn’t allow for either, it’s sometimes possible to take advantage of tax-deferred retirement opportunities without the employer,” advises one expert. If you’re unsure where you will eventually retire, at the very least, start building an emergency or rainy day fund. This fund can grow over time and eventually become your retirement nest egg. Ask a financial advisor in your home country if there are alternate retirement funds available to overseas workers. For example, British expats could consider a QROPS scheme.


This article was previously published on SendFriend.io

About SendFriend:

In the aftermath of the devastating earthquake of 2010 hit Haiti, our founder, David, was a young analyst at the Office of the Special Envoy to Haiti at the World Bank. He witnessed firsthand the resilience and strength of the worldwide Haitian community, as Haitians around the world sent home over $2 billion to support their loved ones in their time of need.

However, as Haitians stepped up their financial support, David saw money transfer companies charge exorbitant fees, north of 7% for people to send money home.

Visits to the Philippines exposed David to the global nature of this problem. As a student at MIT, he was inspired by blockchain technology and guided toward it by Professors and technologists as a potential solution to the high cost of international remittances. The result was SendFriend.


Featured Image Credits: Pixabay


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