Collection letter: how to write one, with a sample you can adapt

A collection letter is a formal written request for payment of an overdue invoice. It is usually sent after friendly reminders have not worked and before a final demand or outside action.

What to include

• Your business name and contact details.
• The customer's name and the invoice number, date and amount.
• The original due date and how many days overdue it is.
• A clear request for payment by a specific date.
• How to pay, with a link or bank details.
• An invitation to contact you if there is a dispute.
• What will happen next if payment is not received, stated factually.

Sample collection letter

Subject: Overdue invoice [number] — payment requested by [date]

Dear [Name], our records show that invoice [number] for [amount], issued on [date] and due on [due date], remains unpaid. We have sent reminders on [dates]. Please arrange payment in full by [date] using [payment method]. If you believe the invoice is incorrect, or need to discuss a payment plan, reply to this letter or call [phone] before that date. If we do not hear from you, we will consider further steps to recover the amount owed. Thank you, [Your name], [Business].

Tone

Be firm, factual and polite. Do not threaten actions you will not take, misstate the law, or contact third parties about the debt. For consumer debts, strict collection rules such as the FDCPA can apply; confirm with an adviser.

Making it part of a process

A single letter rarely works on its own. It works as one step in a schedule. AI Money Recovery builds that schedule from your invoice data, requires your approval before anything is sent, logs every message and charges a performance fee only when money is recovered.

Frequently asked questions

When should I send a collection letter?

Typically after one or two reminders have gone unanswered, often around 30 days overdue.

Is a collection letter the same as a demand letter?

A demand letter is usually the final, more formal step that states a deadline before further action.

Should I send it by email or post?

Email is fine for most B2B relationships. Post or tracked delivery adds a record if the matter may escalate.

Can I add late fees in a collection letter?

Only if your contract or terms allowed them and local law permits. Confirm before adding them.