Accounts Correspondence

Suppose you go to a bank to get information regarding different accounts and credit cards. The employee tells you about them. He also tells you about different schemes. Sometimes you get this information in written form. Also, you have noticed that you get an invoice or bill while purchasing some stuff online.

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In business also, we deal with financial transactions on the daily basis. Also, a bank or any firm or a supplier write a collection letter to a person regarding repayment of loans. All these come under the category of account correspondence. In this section, we are going to learn about them and the collection letter.

Accounts Correspondence

A correspondence is a written form of communication. Accounts correspondence is a written statement regarding an account, making payments, or other financial transactions. Some of them are invoices, delivery challans, statement of accounts, credit/debits notes, collection letters.

Browse more Topics under Business Correspondence

• Meaning and Importance of Business Correspondence
• Essential Qualities of a Good Business Letter
• Parts of a Business Letter
• Human Resource Correspondence
• Goodwill Letters
• Purchase Correspondence
• Tender Process and Notices
• Handling Complaints
• Sales Correspondence
• Insurance Correspondence

Collection Letter

A collection letter is a written notification to inform a consumer of his due payments. It is an official message to a borrower. A collection letter may include reminders, inquiries, warnings or notification of possible legal actions. Although a collection letter is a firm notice to a borrower, it must be written in a polite way. One should not use slang, offensive, and abusive words.

Characteristics of Collection Letter

• The reason or the objective of writing a collection letter.
• Reference of the previous letters (if any).
• Name of the creditor or the company issuing loans.
• Name of the lender.
• Full debt amount.
• Additional costs or terms.
• Last deadline for the payment of the debt.
• Inquiry about the delay.
• In the case of many reminders, one should include a list of possible legal actions in the letter.

Types of Collection Letter

A collection letter is broadly classified into three categories. They are

1. General Reminders.
2. Inquiry letters.
3. Official collections letters.

Reminder Collection Letter

It is written with an assumption that customer forgets to make the payment. General assumptions like money problems or medical issues are made. Always use a friendly manner to write it.

Inquiry Collection Letter

As the name suggests, the main purpose of this type of letter is to make an inquiry. The writer wants to inquire about the reasons for the delay of the payments. Here, the writer asks for the keenness to help the customer. One can give the choice of partial payments here. It helps to maintain a good relationship with the customer.

Appeal collection Letter

A writer writes this letter when the borrower is not responding to any of the previous remainders. Here, the writer uses an aggressive approach without being rude. One needs to maintain fairness.

Ultimatum Collection Letter

Here the writer mentions the action which can be taken in case of failure of payment of the loan. One uses the logical and fair statements. Various punishments like debarring from further business, legal actions are stated in this letter.

Solved Example for You

Problem: Categorize the following into Do’s and Don’ts

• Make use of positive appeal in the letter.
• Make use of offensive language.
• Harass the debtor.
• Have good knowledge about the collection policies and laws.
• Be a little flexible.
• Start the letter as you doubt the honesty and capacity of the debtor.
• Try to build up your goodwill.

Solution:

Do’s	Don’ts
Make use of positive appeal in the letter.	Make use of offensive language.
Have good knowledge about the collection policies and laws.	Harass the debtor.
Be a little flexible.	Start the letter as you doubt the honesty and capacity of the debtor.
Try to build up your goodwill.