Exchanging goods or services for currency is the fundamental equation for business. But what happens when someone fails to pay what they owe? How do businesses collect on an outstanding balance from a customer or client?
Recovering on an amount owned, or an “open account,” can often be accomplished with a well drafted and effective demand letter. A demand letter notifies a party that a balance is outstanding, with sufficient detail, directed to the person or proper representative of a company who is in place to address the situation. In many circumstances, a demand letter must specify sufficient details in order to satisfy legal requirements for recovery. In other situations, a simple demand letter will suffice.
While many factors go into an effective demand letter, three simple tips will increase your chances of getting paid what is owed.
- Send the Demand Letter Via Certified Mail
Certified mail conveys a sense of importance and urgency to the matter. The use of certified mail also creates a record showing that the demand letter was sent on a particular date and was received by a particular person. This paper trail may be important should additional legal action required.
- Attach Invoices to the Demand Letter.
An invoice will aid the customer or client in recognizing what the outstanding balance represents. This detail helps to associate the charge with a particular good or service received. Additionally, some courts require that a demand letter have invoicing attached in order to trigger penalties or attorney’s fees.
- Consider Having an Attorney Send the Demand Letter.
Few things get more attention than getting a letter in the mail from an attorney. Outside counsel is sometimes best for accomplishing this task because it allows a third party to be the “bad guy” when pushing for recovery and may allow the easiest transition to maintaining a business relationship with the past-due customer.
If a customer, vendor, or client owes you money, consider hiring a lawyer or law firm to assist in collecting sums due. Often times, the costs and fees are paid for by the other party and in some situations, penalties for failure to timely make payment may be in play. Call the attorneys at Sternberg, Nacarri & White, LLC for a free consultation today.