In B2B sales, extending credit to customers can put your business at risk. If you do not receive payment, you could end up having to take out a loan just to cover your employee’s payroll or the next batch of inventory needed. It really shouldn’t be this difficult or scary. When it comes down to your business credit risk, you should be checking in on your customer’s credit history and credit reports before even considering extending credit. By getting involved with credit reports in your business, you can use the relationship in your collections efforts.
A major way you can lower business credit risk is by sending notice letters to all your customers that you are actively reporting their payment history to a credit bureau. This will sit well with well-paying customers because their good payment history will only boost their report. However, you can lower your business credit risk with late payers by using this letter to incentivize their payment.
That’s why we created templates for you to help keep you on track with monitoring your customer’s credit reports. Use the templates below to send reporting notice letters to customers.
INITIAL NOTICE LETTER
Dear Customer X,
We understand that in today’s business environment relying on a line of credit to purchase goods and inventory is vital to a company’s success. Good credit plays a crucial role in being able to continue day-to-day business, and we want to help you on this route to gain access to credit you deserve.
In order to meet our goal of practicing best-in-class credit, we actively participate in reporting business credit to XYZ bureau. Through this, we hope to promote transparency and honesty in business credit transactions.
Next month, we will be reporting all open and paid accounts to XYZ bureau. The information provided by us will become a part of your business’ credit history and will be available for use by future creditors, including banks, service providers, advertising, leasing companies, etc. Reporting your payment history will help your company to build and maintain a strong credit history that will be accessible to creditors worldwide.
Please review your account information and act upon any open invoices.
Thank you for your support.
FINAL NOTICE LETTER
Dear Customer X,
After our repeated attempts to collect on your past due balance, we will now have to take further action. In 30 days, we will forward your account to a collection agency. Further, on that same date, we will report the past-due status of your account to XYZ bureau. This payment information will become a part of your business credit history, impacting your relationship with future creditors.
To avoid these actions, please remit payment immediately.
Not only do these letters inform your customers that you’re actively monitoring their credit risk, but it gives them that final push to remit payment. It is your right as a company extending credit to report chronic late payers. You must protect your business credit risk. Reporting a customer’s credit history will allow you to reward those that pay on time and incentivize those who aren’t to begin doing so.