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Mountain States Commercial Credit Management – elevated credit and collection services since 1988. Call us to improve your cash flow.    800-457-8244

Credit Corner from MSCCM

Articles

Writing Credit & Collection Letters

To no other group of correspondents are good letters quite so important as they are to a company’s credit department.

Some suggestions for writing better letters:

1. Think before you write!  Take a minute, perhaps two minutes, to think about what you wish to say and how you can say it best. Think about your reader – how will the individual react to what are you going to say. Appreciate the person’s perceptions of the situation as well as their expectations.

2. Be sure to know your objective!  Remember the importance of retaining good will as well as the collection of the debt. Be sure every objective is sharp and clear in your own mind; then you can be fairly sure it will be sharp and clear to your reader.

3. Get all the facts first!  Before you start to dictate, assemble all the information you will need to write your letter concisely, clearly, and courteously.

4. Visualize your reader!  Mentally seat yourself across the desk from your reader; then talk to the person in simple, friendly, natural language. Your approach must be positive and “reader oriented.”

5.  Analyze your finished letter!  Will my reader know exactly what I mean? Will every word build goodwill? Have I injected just the right amount of tact and firmness? Will the reader respond favorably?

Of course, these are only a few suggestions. Read them. Analyze them. Put them into practice. They may help you write better letters … build goodwill … and Collect more money!

Writing for Today

The people who read our letters will not urge us so much by our literary English and grammatical niceties as by our friendliness and courtesy. Today, it is friendly to be informal. It is courteous to express ourselves with words that are easily understood.

It goes without saying that words are the ingredients of our letters. The best of those ingredients are those simple, informal little words we use when we talk; in other words, the modern speech of today.

The “Golden Rule” today, so far as letter writing is concerned, is to write as you talk. When sentences and paragraphs are short, reading is much more pleasant and more easily understood by the person who receives your letter. The purpose of your letter is to get your ideas from your mind to the reader’s as precisely as possible. Use down to earth words and be as specific as you can.

By following these suggestions, you will achieve the results you are after more quickly and more effectively. In future bulletins, we will share sample letters for different situations.

Role of the Credit Manager

In his book Communication for Management by Dr. Norman B. Sigband:

“The credit manager is surely one of the key individuals in an enterprise. The manner in which he administers his department has a profound effect on the progress of the firm. The credit manager who grants credit too liberally can overextend the resources of a company. On the other hand, if his viewpoint is very conservative, he will not extend the quantity of credit he should, and competitors will secure the accounts he was reluctant to underwrite. In such instances his firm’s sales may not advance or may even decline appreciably.”

Management today recognizes the need for a thorough, progressive, carefully administered and controlled credit system. In this system, the credit manager plays the dominant role-and he frequently does this through the letters and reports he writes.

Among various situations he encounters which require correspondences are:

1. Acknowledging applicants’ request for credit

2. Acknowledging receipt of credit data

3.  Requesting credit information from references furnished by applicants

4.  Sending credit information in response to requests from other credit managers

5. Granting credit

6. Refusing credit”

Dr. Sigband’s remarks underscore the contributions of the credit manager to the economic health and growth of our country, and give the credit function its proper professional status.

REMEMBER… The objective of all letter writing is to create a good substitute for a personally delivered message. The more personal your letter, the better chance it has of achieving that objective.

Helpful Examples of Credit & Collection Letters

• Requesting Bank Credit Information

• Order:  Asking Permission to Ship COD

• Discounts:  Acknowledging Payment – Unearned Discount

• Request for Check to Release Order

• Inquiry for New Account

• Credit Inquiry Letter: New Customer

• Requesting Financial Statement and/or Additional Information

• Insufficient Funds Check

• Granting Extension and Establishing a Payment Plan

• Friendly Payment Request

• Final Appeal Collection Letter

• Last Resort Collection Letter

Need an answer to credit or collection related question? Please feel free to contact us!

Random Quote

I’ve used MSCCM for over 20 years and find them very professional and quick with updates. They do a great job on claims that have been pretty worked over by my staff. I’m very happy with their performance.

— Kevin Kellogg, Credit Manager, Hunter Douglas Fabrication