At this point you’ve worked very hard to collect the invoice from your customer directly; you have made numerous collection phone calls, sent emails, left messages, and sent three previous collection letters. At this point it’s time to let someone else take over, such as a collection agency or the courts. You’ve already warned your customer that this could happen in the third collection letter and while it is not mandatory that you send a notice to let the customer know you have followed through on that warning, it can smooth the transition for all parties involved and may even inspire them to contact you.
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Here is a sample template for a notice of legal action letter:
Dear Mr. Smith,
At this time we still have not heard from you in regards to invoice #12345 for $___ which was due on ___. Nor have we gotten a response to numerous phone calls, emails, or the letters sent on ___,___, or ___.
Because we have failed in our attempt to work this out with you directly, I regret to inform you that we have reported this issue to the credit bureau and turned this invoice over to a collection agency who will be in contact with you in regard to the payment of this invoice.
There is not much to this notice of legal action letter because at this point, there is not much left to say, other than to inform the customer that they will no longer be working with you directly on this issue. Remember, that while you may be pretty frustrated at this point it is important to keep your cool and remain professional at all times.
The notice of legal action is the final letter in our collection letter sample series, you can find links to the previous articles and the examples below. A lot of companies, especially those who have a lot of invoices to track, have a tough time not only sending timely collection letters, but identifying which of their invoices are overdue and by how many days. Why? We have found that most companies are not using the right tools to efficiently track, manage, and take action on their A/R data.
When businesses rely on manual processes such as aging reports and spreadsheets to manage invoices, collectors are spending hours on data entry, spreadsheet maintenance, and other tedious tasks when they could be calling customers to follow up on invoices to ensure receipt or calling about upcoming due dates. You can solve this problem by using accounts receivable management software which will not only help you quickly report on the current state of your invoices but automate emails, schedule follow up calls, and eliminate time consuming administrative tasks.