How to Write Your Own Debt Collection Letter Better

How to Write Your Own Debt Collection Letter Better

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Hi, my name is Adam Stewart, Debt Collection Expert and owner of Debt Recoveries Australia.

It’s no secret that positive cash flow is the lifeblood of any business. Few people enjoy chasing valued clients/customers for unpaid accounts, but to keep the cash flowing, it’s crucial to stay on top of your outstanding debtors.

The need for clear, consistent and persistent communication when collecting debts cannot be stressed enough.

I am assuming you have sent your invoice and statement, perhaps even a reminder letter or email. Yet, you still have not received payment.

The next step is a debt collection letter or email.

Yes, email it!

Wherever possible, email your debt collection letter. Don’t worry about registered mail; it’s a waste of money and time. In fact, snail mail is a total waste of time and very old-school. Email (or text messaging) is best.

How would you write a good debt collection email? A combination of the right content and the right tone of voice will lead you to the results that you are after. Here are some tips:

1. Short and sweet

Keep it short and to the point. Remember, most people will actually only read the title of your email, maybe look at the attachments, that’s it. So make your email title catchy, such as “URGENT-Payment Required” or “ Invoice Overdue-Please Pay Now!” Make sure the content is brief, with short sentences and simple plain-English words. No more than 3 paragraphs.

2. Personalise and customise

Use their name if you have it. Keep it friendly and personal. If it feels like a generic debt collection template letter, they won’t take much notice. If they see their name clearly mentioned and specific details about the debt, they are more likely to pay attention.

3. Avoid threats or intimidation

Remember, this is simply a reminder for payment, so keep it friendly. The secret to success in debt collection is friendly, consistent and persistent. Keep it friendly, make sure your debt collection processes are set up to be the same each month, for every client and make sure it’s a persistent approach, within the ACCC debt collection guidelines.

4. Be firm but friendly

A letter of demand can serve to remind your client of the repercussions of non-payment, which may include legal action. This is not threatening your client, merely pointing out the real facts. You can actually commence legal action at any stage, with no further warning to your client, if you feel you have a contract that has been broken and you do not wish to waste any further time with more letters.

5. Provide facts and figures

Communicate all facts and figures that are necessary to get your message across and make sure you provide the information that your customer needs; make it as easy as possible to pay you. Attach all invoices, statements, copies of contracts- any documents that pertain to the debt. This helps the client/customer to identify the transaction and their liability to pay

If your first attempts to get paid were not successful, it’s time to involve others. Copy all communication after the first reminder to your debtor’s escalation contact.


Don’t want to even send a debt collection email? Outsource it to a Debt Collection Professional. Sometimes it’s good to outsource the whole process to a debt collection professional. This will free your time to do what you do best, looking after your client or customer. It will also send a strong message to your client/customer that you are serious about payment. See this blog about choosing the right debt collection professional.

If you still want more advice, The Victorian State Government, through Business Victoria, actually have some pretty good advice on their website, about debt collection in general, also some really good free templates you can use.


Would you like to have your own copy of a debt collection letter of demand? Get our free template pack here:

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3 Comments on “How to Write Your Own Debt Collection Letter Better

  1. Pingback: Phone Calls vs. Emails for Debt Collection: Which is Better? - Debt Recoveries Australia

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