Collection letters and dunning letters are those notices which are sent by a firm to its customers reminding the letter to pay their outstanding dues to the former.
Now a days every seller has to face the problem of collection, as a sizeable bulk of business is done on credit .To solve this collection problem , the seller has often to resort to what is called collection or dunning letters.
Purpose of collection letter.
a good letter of collection has the following three-fold purpose:
1. Collection the money
2. Retaining the customer
3. Building goodwill.
Collection business has to be handled most carefully. It requires tact and patience. If the collection manager is impatient, or rude, or mishandles the situation in some way, He is likely to lose the money as well as the customer. The immediate purposeof a dunning letter is to recover the outstanding amount.It may happen some times that the recovery is made in such a harsh way that the firm may get the amount but alienate the customer from his business concern for good. This shows poor collection policy. the age - old maxim in this regard is - collect the amount but keep the customer. A good collection letter should go a step further by showing courtesy, It should try to cement relations and build goodwill.
1 comment:
I'm sure you mean to say "reminding the latter ie customer to pay the former ie creditor. For better readability it's best not to use too many pronouns.
Typos and misspelling by the way reduce not only readabiltiy but credibility. Now a days might best be replace with "Today", or "in today's difficult economic environment"
The purpose of a collection letter is to collect your money without damaging your relationship with your customer. It is not about building goodwill.
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