How to Write a Balance Due Letter
Whether you sell widgets or provide services and expertise, letters requesting payment on past due accounts are a necessary part of doing business. Sometimes, people simply need to be reminded about their debt. Other times, customers may be purposefully avoiding their obligations. In the former case, these letters can speed up payment of the amount due; in the latter, they can help demonstrate the steps you took before seeking formal collection efforts, which may help you prevail in court. In all cases, the letters should be drafted clearly, concisely and in a polite, professional manner
The introductory section of the letter should clearly state the balance due. Following a simple salutation (such as “Dear Mr. Smith,”), open the letter by cordially reminding the reader about the exact amount owed. Use a statement such as “This letter is to remind you of your outstanding balance owed to ABC Corporation. Our records indicate your account is past due in the amount of $56.39.” Prior to drafting this section of the letter, verify the exact amount due with your accounts payable. Attach a copy of the outstanding invoice to the letter and make reference to the attachment in this section.
Depending the nature of the debt, your business’s accounts payable policies and how quickly you would like to recoup the money owed, the acceptable form of payment is another important detail to state clearly. Cash in hand is obviously faster than waiting for a personal check to clear, but depending on the amount it may not be feasible to demand repayment this way. Likewise, not every business accepts credit cards, and companies may accept one issuer’s card but not another. In any event, include a statement such as “Payment may be made by cash, check or credit card. We accept Visa or Mastercard. Checks may be made out to Accounts Payable.”
Do not leave the demand for repayment’s deadline open for interpretation. Use a statement such as “Please remit this balance within 10 business days or contact our office immediately to make a payment over the phone.” Stating a deadline not only reiterates the sense of urgency for the reader, but also gives you a timeframe for when you can expect payment and allows you to consider what to do next if payment is not rendered within that window.
If there are any consequences for a further delay in payment, state them in the closing of the letter. A common consequence is the initiation of formal legal action to recover the amount in court. Other consequences may be elevating the dispute higher up in the organization or stopping services. If the letter is a final warning, use a statement such as “This is the final notice you will receive. If we do not receive full payment within 10 days from the date of this letter, we will seek all legal remedies available to recover this debt.”