Receivables Management: Should I Send a Letter, Email, or Fax?

While credit and collections phone calls can be the most direct way to get in touch with your customers about outstanding accounts receivable, sometimes written communications are necessary to back up a phone call or they are the preferred way in which your customer would liked to be contacted. It is important that your written receivables management communication is clear, concise, and does not leave room for interpretation by your customer. If they are confused after reading your letter/email/fax, that can delay payment. Here are a few ways to make sure poorly written communications does not hinder your receivables management efforts and the pros and cons of each type of written communication.

Create a Checklist

A critical element of the letter is a checklist you provide to define reasons for non-payment. Providing an easy form for your customer to complete will accelerate resolution times. The specifics can be tailored to your industry and your specific types of customer but might include some of the following options:

  • Payment was mailed on _____________ by check number ____________
  • Payment is scheduled for ______________
  • Invoice not received. Please provide a copy.
  • Need Proof of Delivery in order to process for payment.
  • Need approved time sheets in order to process for payment.
  • Need Purchase Order number (or copy of PO) in order to process for payment.
  • Other reason: ____________________________________

Be clear and to the point. Here is an example:

“Payment for invoice 1234 was due on March 15 but as of today we have not received payment. Can you please take a moment to complete the bottom portion of this letter and return it to me or, if it’s more convenient, give me a quick call to discuss the matter.”

Always be sure you provide a phone number, fax number, mailing address and email address on the letter. The letter will have the same content regardless of how it is sent.

Mail, Fax, or Email?

The next question is whether to send this letter by postal mail, fax or email. There are advantages and disadvantages to each.

  • Mail is more expensive because of materials cost and postage and takes longer to get there. However, a professional looking envelope sent to the Accounts Payable Department of any business will be opened and read. Further, you will be notified if the mail is undeliverable – potentially a serious problem – and can request “Address Service” to be informed by the Postal Service (for a small fee) that mail is being forwarded, allowing you to update your records.
  • Fax requires that you have a working fax number for the business that goes to the right department.  Some businesses do not have fax lines or they can have multiple.  Ideally you would have requested a fax number on your credit application or order form but that does not always happen. Depending on your office equipment, sending a fax can take significant effort and may be just as costly as mail. Send a fax if it’s easy to do so and the customer has provided a fax number for their accounting or accounts payable department.
  • Email is easy, fast and inexpensive but does not always get to the right person.  Email can be easily ignored, blocked by spam filters or sent to a generic address (info@somecompany.com) and wind up nowhere.   Also, the email address on file is often the purchaser and not the Accounts Payable department. You might want to test that by sending a “welcome” email to new customers and asking for a response of some kind to verify that it was read.

 Receivables Management

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