How To Write An Effective Collection Letter (with Template)

Requesting payment from a client or debtor can be uncomfortable. While you want to get paid for rendered goods or services, you also don’t want to lose a loyal customer. You also don’t wish to receive a negative review. This means that you should be both firm and understanding in your collection letter.

A collection letter is a formal document sent to a client or debtor who is behind on payments. It is used to remind them that their bill is overdue and to suggest that they honor the payment.

Do you have some outstanding invoices? Here is everything you need to know about drafting an effective collection letter.

What to Include in a Collection Letter

Most businesses send collection letters in intervals. The first correspondence is less urgent and acts as a gentle reminder to the reader to pay an outstanding debt. As the letters progress, they become more urgent and final. Regardless of the stage you are currently in, here are all the details you should include in your collection letter:

  • Nature of Debt – Provide the reader with the invoice number, name of purchased goods, and amount due. If you have written previous collection letters, mention that these details serve as a reminder.
  • Debt Details – When was the date of the original invoice? How many days past due is the debt now? If anything has changed since your last communication with the reader, mention it here.
  • Previous Attempts – Have you made previous attempts to collect the debt? Mention any collection letters, emails, and phone calls to which the reader failed to respond.
  • Instructions – Provide the reader with payment instructions, including a new deadline.
  • Contact Information – Include your email address and phone number and invite the reader to contact you with any questions.
  • Warning – If this is a third or fourth letter, mention the steps you plan to take if your instructions are ignored. Be firm but polite and professional.

Writing Tips for a Collection Letter

Even knowing what to say, it can be difficult to figure out how to say it. Here are some tips to help you get your message across in an effective collection letter:

  • Write in a polite but firm tone.
  • Always provide details of the purchased goods or services.
  • Politely remind the reader of their previous agreement or contract with you.
  • Provide the reader with several action steps they can take
  • Create a new deadline
  • Keep your letter short and to the point.
  • Avoid using rude or dismissive language.

Effective Collection Letter Format


{Client’s Name}

{Client’s Address}

{City, State, Zip Code}

Re: {Invoice Number}

Dear {Mr./Mrs./Ms. Last Name},

This is to remind you of your invoice {invoice number}, which was due on {due date}. According to our records, you owe {company name} a sum of {overdue amount} for {name of product provided or service rendered}.

The {product/service} was provided on {date} and you agreed to make payments by {set pay date}. This was {duration e.g., 2 weeks} ago.

We would appreciate it if you made payments to {account number} by {deadline}. You can do this through {payment method 1} or {payment method 2}.

Thank you for your continued support.


{Your Name}

{Job Title}

{Company Name}

Sample Effective Collection Letter

19 November 2030

Landon Tim

213 South Main Street

Jersey City, NJ 21345

Re: Invoice Number 2345/PQR

Dear Mr. Tim,

I am writing to remind you that your account is overdue. According to our company records, you have an outstanding balance of $1,234, which is payment for roofing services from PQR industries. These services were provided on 20 October 2030, and you promise to make payments by 1 November 2030.

Your account is now almost 3 weeks overdue. We trust that you have received our previous collection letters. If not, kindly confirm that you have received this one and are planning to act on it.

We would appreciate it if you made payments to account 456PQR560 by 25 November 2030.

Thank you for your continued loyalty to PQR Industries.


Paul Reynolds

PQR Industries

Effective Collection Letter (Word Template)

File Format
  • MS Word


Sending an effective collection letter is the best way to motivate the reader to make a payment. It should provide details of the bill, including invoice numbers and dates. Additionally, it should also provide a preferred means of payment, a deadline, and an ultimatum.

While some debtors try to escape payment, others have genuinely forgotten about the invoice. Remember to be polite and professional.

Finally, always include your name, signature, company name, and letterhead, if possible.

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