Factors to be considered in writing Collection Letter

Collection letters are written in a series. Each successive letter becomes stronger in tone. However, letters should be written in such a way so as to collect the dues promptly by maintaining relationships with the customers. a through consideration of the following factors may help the seller to achieve the goal of wringing collection letters.

  • Expressing regret: In collection letter, the seller should regret that the account of the customer is still unsettled.
  • Mentioning the dues: The amount of dues, due date of payment, items of sales etc. should be clearly included in the collection letter.
  • Persuading the customer: In writing an effective collection letter, an attempt is to be taken to persuade the customer to pay the bill promptly.
  • Honor to the Customer: The language of his letter should be courteous, polite and gentle. it should be written in a motivating tone. no such word that can hurt the customer should be used/
  • Considering the nature of customer: In writing collection or dunning letter, focus should be given on the particulars of customers like their previous dealings, position in credit rating, goodwill, business honestly, size of business, present circumstance of the customers etc.
  • Mentioning the reference: If collection letters are written in a series, every subsequent letter should mention the reference of the previous letter.
  • Giving importance to the customer: In order to realize the dues, the seller needs to put importance and value upon the customers. For doing so, the seller can use some motivating words or phrases.
  • Indicating legal action: If the customers do not pay the dues after sending reminder and appeal letters, the final letter of the series should be written by indicating that necessary legal action should be taken against them.
  • Sending Through Post: The seller should send collection letters especially, the last letter of the series through registered with acknowledgments. it helps to avoid unnecessary delay or missing of the letter or denial from the part of the customer.

COLLECTION LETTER or Dunning Letter
Finally, we can conclude that the ultimate goal or a collection letter is to maintain goodwill while getting overdue payment from the customers. Lack of concern about customer’s goodwill will cause them to do business elsewhere. Therefore, collection letter should always rely on the art of persuasion.

Features of Ultimatum Letter or Final letter of dunning letter series

Dunning letters are written in a series. The series starts with sending a statement of account. After that, reminders letters are sent. if reminder letters do not work, credit department sends an inquiry and discussion letter. if this letter also fails to produce satisfactory result, the seller then sends an appeal and urgency letter. if the customer still ignores the seller’s request, then the final letter of the series is drafted indicating that necessary legal action will be taken against the customer. the final letter of the series contains some distinct features. these are as follows:

  • Mentioning the reference of previous letters
  • The opening section of the ultimatum letter is brief because the customer is well aware of the situation.
  • The language of this letter is not discourteous but makes less use of courteous words.
  • The seller expresses relatively straightforward opinion.
    In this letter, the seller clearly shows his dissatisfaction regarding nonpayment of dues by the customers.
  • Since this is the last letter, it gives an ultimatum for payment of overdue bills.
  • Through this letter, the seller indicates threat of legal action if the customer does not pay within the date.
  • In this letter, the seller offers any discussion with the customer only after the full payment of his account.
  • Although this letter indicates threat of legal action, it expresses regret for this.

Advantages and Disadvantages of Horizontal Communication

Horizontal communication is essential for smooth functioning of organizational activities and for interdepartmental coordination. This type of communication is especially important for larger scale enterprise. The followings are the main benefits that can be derived from horizontal communication.
Coordination: Organizational activities are divided into various departments or groups. Horizontal communication facilities coordination of various departmental activities so that organization can reach its ultimate goal.

    • Reducing Misunderstanding: Misunderstanding and conflict among the mangers and staffs are very common in organizational life. Horizontal communication helps to reduce possible misunderstanding and conflict though meeting, discussion, face to face conversation etc.
    • Strengthening group efforts: Group efforts and teamwork are essential prerequisites for organizational success. Horizontal communication helps in reducing conflicts, controversies, and differences in opinions and thus establishes consensus among the managers and workers concerned. This consensus strengthens group efforts and team spirit in the organization.
    • Performing inter departmental communication: Horizontal communication occurs between people at the same level in various departments. Therefore interdepartmental communication occurs smoothly.
    • Gaining benefits of informal communication: Though horizontal communication is formal in nature, it enjoys some degree of informality in exchanging information as the senders and the receivers hold same position, status and honor.
    • Distortion free communication: Horizontal communication is usually free form distortion. Since the sender and the receiver of horizontal communication can exchange information directly, there is no possibility of distortion of message.
    • Bringing dynamism in workplace: Horizontal communication helps to overcome misunderstanding and confects among the managers. It creates an environment of cooperation, teamwork and team spirit. This brings dynamism in performing organizational activities.

In conclusion, we can say that flow of information through horizontal communication channel is inevitable for organizational success. In the present complex business world, efficient functioning of a large business organization mostly depends on effective horizontal communication.

Disadvantages of Horizontal Communication

Though horizontal communication is essential for smooth functioning of an organization, it is not completely free form defects or flaws. Followings are the possible drawbacks of horizontal communication.

  • Rivaling attitude: Horizontal communication occurs between the people at the same rank and position. If there exists any hostility or rivalry between them, they will not exchange information spontaneously. Moreover, they will conceal their information intentionally to deprive someone from the real news.
  • Interdepartmental conflict: The success of horizontal communication depends on good relationship between sender and receiver. If there is any conflict, distrust or suspicion between them, horizontal communication will be ineffective.
  • Discouraging attitude of top management: In some cases, top managers discourage horizontal communication thinking that workers may become friendly with one another and may create threat for the management.
  • Ignoring vertical communication: More concentration on horizontal communication may work as substitute of upward and downward communication. In that case upward and downward communications are ignored.

At last, we can conclude that the above stated factors can diminish the utility of horizontal communication. So the persons concerned should be well aware of those factors when they communicate horizontally.