Success in collecting over-due accounts by letter depends largely on three factors:
1. Knowledge of on's customers.
2. Systematic follow -up.
3. Good Tone.
1. KNOWLEDGE OF CUSTOMERS:
Successful collection required not only broad knowledge of human nature, but also a knowledge of business background and paying habots of on's customer. The writer of collection letters must realise that the people are sensitive about their credit standing end, so must he handled with care. Generally, business firms clears off their accounts more readily than indivisuals, but even business concerns some time fail to pay their bills ontime.
Many companies classify customers as (1) every good risk, (2) good risk (3) poor risk. But even the "very good risk" will need the extension of time if he has suffered from fire or some natural hazard, or illness, etc. The writer must Know or discover such circumstances if he is to adapt his collection letters to his readers and collect the overdue accounts , and retain the goods will of his company.
2. SYSTEMATIC FOLLOW-UP:
A customer is reminded when payment becomes overdue from him. The first reminder is only a biginning. If he fails to pay off his debt, he is sent a series of reminders one after the other. The pressure in three reminders increases steadily and gradually until finally he is threatened is consistent and unremitting, The customers, therefore,have developed a respect for the collection system. The timing of these follow-up letters is an important factor. If the customer is a good risk, he should be given enough time before he is threatened with legal action, conversely, the poorer, the risk,the shorter the time.
3. GOOD TONE:
Collection letters, even more than others types of correspondence, require good tone. It depends on the respect and consideration for the recipient of the letter as an indivisual. The language used in a letter of collection should be temperate, especially in difficult situations. Common mistakes in tone are anger, scolding, bullying or threatening the customer. This should never be done. The letter must be written in tactful language and good tone.
