I noted last month that third-party collection letters, in other words collection letters written and mailed from a collection agency, are more effective than in-house collection letters. While this is true later in the collection process, in-house collection letters have their place. In-house collection letters can and should be a component of any complete accounts receivable management system.
If, for example you’ve made several calls (you leave a message every time, right?) and have not received a return call, a quick letter faxed and then mailed, will often generate a return call. If your first letter and subsequent phone calls don’t win you a return call, a copy of the first collection letter you sent or a 2nd collection letter should be faxed and mailed to either an accounts payable manager or the controller.
In the end, if an account goes bad and you need to write it off you’ll want documentation of your collection efforts, particularly if it’s a large balance. The IRS could require the documentation to allow the write off.
The bottom line, energy out equals results in. Use all of the resources available to you to collect your money on time. That means make calls, leave messages, fax collection letters, mail collection letters, use third-party resources i.e. collection agencys, do what you have to do and do it on time. Your company’s bottom line depends on it.