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Accounts Receivable Demand Letter for Canada

Accounts Receivable Demand Letter Template for Canada

A formal written demand for payment of outstanding accounts receivable, drafted in compliance with Canadian federal and provincial debt collection laws. This document serves as a critical step in the debt collection process, formally requesting payment of overdue amounts while maintaining professional standards and legal compliance. The letter includes specific details about the debt, payment terms, and consequences of non-payment, while adhering to provincial regulations regarding collection practices and limitation periods. It establishes a formal record of the collection attempt and can serve as important documentation if legal action becomes necessary.

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What is a Accounts Receivable Demand Letter?

The Accounts Receivable Demand Letter is a crucial business document used when formal collection efforts become necessary for outstanding payments in Canada. This document is typically employed after regular invoicing and informal collection attempts have failed to secure payment. It serves as a formal notice to the debtor, outlining the specific amount owed, payment history, and deadline for payment, while complying with Canadian federal and provincial debt collection regulations. The letter must strike a balance between firmness and professionalism, clearly stating the consequences of non-payment while maintaining legal compliance. It's an essential step before pursuing legal action and must include all legally required elements to be enforceable in Canadian courts.

What sections should be included in a Accounts Receivable Demand Letter?

1. Sender's Information: Complete business name, address, and contact details of the creditor

2. Date: Current date of the letter issuance

3. Recipient's Information: Complete name, address, and contact details of the debtor

4. Subject Line: Clear indication that this is a demand for payment, including reference numbers

5. Outstanding Amount Details: Precise amount owed, including original amount, interest, and any additional charges

6. Payment History: Brief summary of the debt origin and any partial payments made

7. Payment Demand: Clear statement of demand for payment, including the total amount and deadline

8. Payment Instructions: Detailed information on how and where to make the payment

9. Consequences of Non-Payment: Statement of potential legal action if payment is not received by the deadline

What sections are optional to include in a Accounts Receivable Demand Letter?

1. Previous Communications Reference: Include when there have been prior attempts to collect the debt, summarizing previous correspondence

2. Interest Calculation Details: Include when charging interest, showing how interest has been calculated and the legal basis for interest charges

3. Payment Plan Options: Include when the creditor is willing to accept installment payments or negotiate payment terms

4. Security Details: Include when the debt is secured by any assets or guarantees

5. Dispute Resolution Process: Include when offering a formal process for disputing the debt

6. Return Slip: Include when requesting the debtor to acknowledge receipt or respond with payment intentions

What schedules should be included in a Accounts Receivable Demand Letter?

1. Statement of Account: Detailed breakdown of all transactions, payments, and charges

2. Copy of Original Invoice(s): Copies of relevant invoices or contracts showing the origin of the debt

3. Interest Calculation Schedule: Detailed breakdown of interest calculations if applicable

4. Payment History Record: Chronological record of all payments and attempts to collect

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Ƶ

Document Type

Demand Letter

Cost

Free to use
Relevant legal definitions




















Clauses















Relevant Industries

Financial Services

Manufacturing

Retail

Professional Services

Construction

Technology

Healthcare

Education

Wholesale Distribution

Logistics

Real Estate

Consulting

Legal Services

Relevant Teams

Accounts Receivable

Finance

Legal

Credit Control

Collections

Treasury

Administration

Risk Management

Corporate Services

Relevant Roles

Accounts Receivable Manager

Credit Controller

Financial Controller

Collections Specialist

Accounts Manager

Credit Manager

Finance Director

Business Owner

Chief Financial Officer

Accounts Receivable Clerk

Credit Analysis Manager

Treasury Manager

Legal Counsel

Collection Coordinator

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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