Getting Results From Credit and Collection Letters

Getting Results From Credit and Collection Letters

T HE AREA OF CREDIT AND COLLECTION IS a delicate one in which all dealings require the gentle touch. Each letter you send should be designed for a specific function, and, regardless of what that function is, each letter should fulfill it with dignity. You will notice as you read the letters in this chapter that dignity is never sacrificed for effect.

One of your most important needs in this area is a definite policy for extension of credit and for collection of overdue bills. You probably have already established such a policy, and it includes the practice of checking the ratings and references of your potential credit customers. This gives rise to the need for the credit investigation letter. After the results of this letter are in, you will need either a letter granting credit or one refusing credit. Another widely needed and used letter is one inviting charge accounts. Occasionally you may have to use a letter of suggestion that tells a customer to change his type of credit account to one better suited to his situation.

You will no doubt find that quite a few of your customers, business as well as individuals, have to be prodded into paying their bills. Some of them need but a gentle reminder; some must have several reminders; others won't pay until they receive an ultimatum. You will need collection letters for all these contingencies. When to send these letters is a matter of company policy. But as to the letters them­selves, those included in this chapter should cover most situations you will have confronting you. All you need do is turn to the page with the appropriate letter and use it exactly as is or adapt it to your particular need. The difficult work of writing the letter has already been done for you.

GETTING RESULTS FROM CREDIT AND COLLECTION LETTERS

• Credit Investigation Letter. With only minor adjustments you can use the same letter to investigate either the credit rating of an individual consumer or the financial standing of a company. When writing to an applicant for financial reports, use the paragraphs marked "to applicant."

General rules.

Don't waste time; come right to the point.

State what the information is you are looking for and why you need it. Make clear that you will keep such information confidential. Always enclose a self-addressed, stamped reply envelope.

Alternate phrases.

(a) Mr. _______, who resides at ___________________, has applied for a
credit account with our company and has given your name as a reference.

(To applicant) Please send us at your earliest convenience copies of your latest balance sheet and profit and loss statement. These reports will help us decide on the amount of credit we can extend to you.

We are in the process of gathering information about the financial respon­sibility of_______________ .

(b) If you would be kind enough to supply us with any information that will help
us evaluate Mr._____________ as a credit risk, both we and Mr._____________
would appreciate it. Information such as his standing in the community, his reputation for reliability, and his financial standing will be of utmost interest to us.

(To applicant) I'm sure you realize how helpful financial reports are for com­panies that work primarily on a credit basis. In your case, the terms you ask require a careful analysis of your financial standing before we can properly decide on the course of action suitable to both of us.
It is our understanding that they have an account with your bank. Would you please send us whatever information you have relative to their ability to enterinto a $________ transaction.

(c) (To applicant) Any information that you send us—and the fact that you seatus information—will, of course, be held confidential. We enclose a reply en­velope for your convenience.

Your financial reports will be held in the strictest confidence and used only to help us make our decision. We are enclosing a reply envelope for your use.

We appreciate your courtesy in supplying us with information, and will, off course, keep everything strictly confidential. We are enclosing a reply envelope for your convenience.

Adapted from: The Editorial Staff (1965) Director's and Officer's Complete Letter Book, Prentice Hall, N.J.