Document background
The Business Collections Letter is a critical tool in managing accounts receivable and maintaining healthy cash flow in business operations. This document is typically used when standard payment terms have been exceeded and initial informal collection attempts have been unsuccessful. The letter serves multiple purposes: it formally documents the collection attempt, provides clear payment expectations, and can serve as evidence in potential legal proceedings. In the United States, collection activities must comply with both federal regulations like the Fair Debt Collection Practices Act and state-specific collection laws. The letter should strike a balance between firmness and professionalism, particularly when the business relationship may need to be preserved.
