Having established your approach and the timetable, a decision should be made regarding the most appropriate collection method.
Customer account statements
Statements should be scheduled and sent out at the start of each month to allow the customer to view exactly what is owing at that point in time. Use the institution debt statement as a base. Sending a statement alone is not considered an adequate form of debt collection but is an essential tool to underpin any other collection activities.
Reminder letters
A reminder letter is a notification sent to a customer, stating that they are overdue in paying. It is referred to as a dunning letter in UFS. Reminder letters follow a progression from polite reminders to more formal demands for payment if the customer continues to be non-responsive.
An institution may use email as the main approach to address outstanding invoices. If you use email, it has the benefit of making your collections more personalised. It is important that these emails are retained in a suitable institution-shared folder as a record of the activity.
Although an institution may create its own dunning letters to assist in making the debt recovery process more personalised, staged, and relevant, the information below should be used as a basic template.
| Reminder level | Information required Apply as appropriate based on whether reminder is email or letter (pdf) based |
Recommended wording |
|---|---|---|
| First | For letter (pdf) based reminders:
This information must be included for all reminders. We recommend using a table format:
Provide a total of the value of all listed items beneath this table. |
It has come to our attention that your account is overdue for payment. [Provide table of outstanding item/s] We are not aware of any reason for non-payment. Therefore, we respectfully remind you that you have exceeded our agreed terms, and we would be grateful to receive your remittance by return. We look forward to hearing from you. If payment has been sent within the last 5 days, please disregard this reminder. |
| Second | Provide a clear indicator this is the Second Reminder for payment. Provide the same information as detailed for the first reminder. |
We regret to note that despite our previous reminder your account remains overdue for payment. [Provide table of outstanding item/s] Should there be any issues which are causing a delay in this payment please contact us as a matter of urgency. Failure to reply immediately with your remittance or details of your query may lead to further recovery action. If payment has been sent within the last 5 days, please disregard this reminder. |
| Final | Provide a clear indicator this is a Final Reminder Stating: Total Balance overdue: [currency] [value] If adding interest, you should provide a clear breakdown as follows: Outstanding Account: £ [Insert sum] Late Payment Costs: £ [Insert sum] Late Payment Interest: £ [Insert sum] Total Balance Payable: £ [Insert sum i.e. the total of the above] |
Despite previous reminders, we are disappointed to note that the above account remains outstanding which is a serious breach of our agreed terms. Wording when you are not adding interest: The University of Cambridge has not yet levied any late payment or interest charges under “The Late Payment of Commercial debts (Interest) Act 1998 as supplemented and amended by the Commercial Debt Regulations 2002”. However, should payment in full not be received within the next five days we may add these charges to your account. Wording when you are adding interest: As this amount is now in serious breach of our agreed payment terms, we have reluctantly added further costs and interest in line with “The Late Payment of Commercial debts (Interest) Act 1998 as supplemented and amended by the Commercial Debt Regulations 2002”. It is now imperative that this amount is settled in full, including late payment costs and interest charges, within the next 5 working days. |
| Then end with: Failure to settle this now extremely overdue account will leave us with little option but to pass this account to our chosen debt recovery agency. We would therefore respectfully suggest that you treat this matter with urgency and remit the full balance due immediately. |
Keep a record of all contact with the customer until payment has been made.
Contacting the customer
Chasing payment by email is our recommended collection method. Emails provide an audit trail of your discussion, with the benefit of being able to attach supporting documents.
In some circumstances, contact by telephone may be the preferred option, particularly where a more immediate response is required. Customers may also be contacted by telephone as a follow-up to an email. Manual records of any calls must be kept.
Contact with the customer offers the opportunity to clarify the situation, resolve any disputes promptly and build a relationship with the debtor.
Your aim is to obtain a commitment from the customer to make the required payment. Confirm the date, value, and method of payment, and diarise a date to check they meet this.
This becomes increasingly important if we need to escalate the debt to one of our recovery options.
If you are unable to contact the customer, and all channels of communication have been exhausted, refer to the Credit Control team as soon as possible.
Latest version 17 April 2024.