Collection letter template

The three stages

After the third letter comes the final demand or the letter before action.

What every stage repeats

• The invoice number, date and amount.
• The days overdue.
• How to pay, with the account or the link.
• A clear date to pay.
• A contact to raise a problem with the invoice.

A collection case worked out

Crest Office Supplies sold toner to Delta Clinics for USD 1,850.00. The invoice was due on 30 September.

On 9 October Crest sends the first letter. On 30 October it sends the second with a new date.

Delta Clinics replies to the second letter and pays half. Crest records it and the third letter asks only for the balance.

What not to put in a collection letter

• Threats of anything you will not do.
• Comments about the customer to third parties.
• Fees that your terms do not include.
• Messages at night or many times a day.

A firm letter is clear about dates and next steps. It never shames the customer.

Common mistakes

• Skipping straight to the firm letter.
• Sending the same text three times.
• Not updating the balance after a part payment.
• No date in the letter.

Field by field

• Customer: the company name and the person who approves payments. Write «Attn: Accounts Payable» if no name is known.
• Invoice: number, date and amount exactly as printed. For example INV-3307 of 31 August for USD 1,850.00.
• Days overdue: count from the due date to the letter date. «39 days overdue» reads clearer than «a while».
• Date to pay: a specific day about one week ahead. Each stage gets a new date.
• Payment details: the bank account, a payment link or both. Repeat them in every stage.
• Signature: a real name and position. A letter from a person gets more replies than one from «Accounts».

Collections email template

Many customers answer email faster than a printed letter. These versions follow the three stages.

First email · Subject: Invoice [number] is open. «Hi [name], invoice [number] for [amount] was due on [date]. Please pay by [new date] at [link]. Thank you.»

Second email · Subject: Invoice [number] is [days] days overdue. «Hi [name], invoice [number] is still unpaid. Please reply with the date payment will go out.»

Third email · Subject: Final reminder for invoice [number]. «Dear [name], the balance of [amount] remains unpaid. Please pay by [date] to avoid a formal demand.»

How to adapt it to the customer

• Loyal customer late for the first time: keep the first letter warm and skip the third if they reply.
• Large company: send it to accounts payable with the purchase order number.
• Customer who broke a promise: quote the date they gave and ask for a new one.
• Customer who paid part: thank them for the amount and ask only for the balance.

A second example from Manila

Bayani Printing supplies menus to a restaurant group in Pasig City.

Invoice BP-0712 for PHP 64,800.00 was due on 15 September.

The first letter goes out on 25 September by email with the invoice attached.

The second letter on 15 October asks for a payment date. The buyer gives 31 October.

Payment arrives on 30 October and the third letter is never sent.

When to stop the letters

Stop the sequence the day a payment or a firm date arrives.

A letter sent after payment annoys a customer who already paid.

Check the bank account before each stage goes out.

If the customer raises a real problem with the invoice, pause and fix it first.

Resume with a new date once the corrected invoice is sent.

After the third letter, decide between a final demand and a write-off.

Small balances sometimes cost more to chase than to forgive.

Write down the reason for each decision in the customer file.

The note helps the next person who looks at the account.

Let the reminders go out on their own

Makatea sends each stage on WhatsApp and email on its day. When a payment arrives, it updates the balance and stops the next message. Try it free for 14 days, no card needed.