Vous êtes sur la page 1sur 34

DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : A.Ram Reddy


Designation : Lecturer
Branch : D.C.C.P.
Institute : SRRS Govt. Polytechnic, Sircilla
Year/Semester : IV Semester
Subject : Business Correspondence
Subject Code : CCP-404
Topic : Collection Letters
Duration : 50 Minutes
Sub Topic : Different Stages in writing Collection Letters.
Teaching Aids : PPT and Animations
CCP404.29 1
OBJECTIVES

On completion of this period, you would be able to:

• Explain various stages of collection letters.

CCP404.29 2
RECAP
So far we have discussed about:

 Meaning of Collection Letters.

 Different Methods of Collection. Different methods are :


1. Telephone call
2. Personal call
3. Bills of exchange
4. Correspondence

CCP404.29 3
COLLECTION LETTER SERIES

 Collection Letters are usually written in a series.

 Each successive letter is stronger in tone than its


predecessor.

 They are sent out at intervals.

 They vary with the type of credit risk involved.

CCP404.29 4
COLLECTION LETTERS SERIES

 If the credit risk is poor, a trader may write four letters


over a period of two months.

 Five to six letters are written over a period of six months,


when there is a good credit risk.

CCP404.29 5
Different Stages in writing Collection
Letters

• First Stage (Intimation of due amount).

• Second Stage (Reminder Stage).

• Third Stage (Inquiry and Discussion Stage).

• Fourth Stage (Persuasion or Appeal Stage).

• Firth Stage (Demanding and Warning or Threatening


Stage).
CCP404.29 6
Different stages in writing Collection
Letters
First Stage (Intimation of due amount.)

• When amount due is not received by due date, intimation


letter is written.
• Collection correspondence starts, from the stage of
sending reminders.
• Because sending statement of account is a duty of the
creditor.
• Purpose of intimation letter - to intimate amount due and
due date.
• This may or may not contain a request for payment.
CCP404.29 7
First Stage contd

 Reference to credit purchased by buyer and invoice


number of goods sold be made.

 Amount of goods sold should be made.

 Addressee should be requested to pay due amount.

CCP404.29 8
Ex.1
1st Stage Intimation Letters.

• M/s.Rama and Company, Godavarikhani purchased


cotton cloth worth of Rs.50,000/- from M/s.Krishna and
Company, Sircilla. Write a letter as the proprietor of
M/s.Krishna and Company to intimate the date and due
amount to M/s.Rama and Company.

CCP404.29 9
Answer to Ex.1
Phone:236754
KRISHNA AND COMPANY
Near Bus Stand,
Sircilla.
Ref.No.16/08. Date:15-2-2008.
To
Ms. Simran ,
Proprietor,
M/s.Rama and Company,
14-1-79, Godavarikhani,
Dist.Karimnagar.
Dear Madam,
Sub: - Your letter No.19/08, dt.10-2-2008.
…………
CCP404.29 10
In response to your order dated 10th February, 2008, we
supplied 500 meters of Cotton cloth. As per the copy of
the Invoice enclosed the amount due from you is
Rs.50,000/-.
Thanking you,
Yours faithfully,
for KRISHNA AND COMPANY,

Encl: Copy of Invoice No.41244. (KRISHNA REDDY)


Proprietor.
………

CCP404.29 11
Ex.2

• Inform Ashok Traders, Kurnoor that you have


dispatched Good Year Tractor tyres ten days ago and
request him to arrange for immediate payment.

CCP404.29 12
Answer to Ex.2
Phone:2312345
BALAJI ENTERPRISES
14-1-91/A,
Brahmin Street,
Thirumala.
Lr.No.BR/S/14/08. Date:15-2-2008.

To
The Manager,
Ashok Traders,
Kurnool.
Dear Sir,
Sub:- Your order No.AT/17/93, dt.10-1-2008.
……….
CCP404.29 13
You have promised in your order of 10th January, that
you would remit the cost of 50 Good Year Tyres on their
delivery in good condition.
It has been ten days since the tyres were received by
you. Since we have heard nothing to the contrary, we
assume that you must have received the tyres in good
condition. So, please send immediately a cheque for
Rs.50,000/- being the cost of tyres.

Yours faithfully,
For Balaji ENTERPRISES,

(CHAITHANYA)
Manager.
……….
CCP404.29 14
Different states in writing Collection
Letters

Second Stage (Reminder Stage):

• If amounts due are not received after first letters another


letter will be sent.

• This is called Reminder stage.

• Debtor is asked to pay the due at an early date.

CCP404.29 15
Second Stage contd

• Refer to statement of account already sent and amount


due.
• Say that customer has overlooked statement.
• Request prompt payment.
• Enclose statement of account again.
• Do not insist on payment. Use soft tone.

CCP404.29 16
Ex.3

You have not received any reply to your intimation letter


to M/s.Rama and Company, Godavarikhani for payment
of Rs.50,000/- towards the price of 500 meters of cloth
you supplied.

CCP404.29 17
Answer to Ex.3
Phone:236754
KRISHNA AND COMPANY
Near Bus Stand,
Sircilla.
Ref.No.16/08. Date:25-2-2008.
To
Ms.Simran,
Proprietor,
M/s.Rama and Company,
14-1-79, Godavarikhani,
Dist.Karimnagar.
Dear Madam,
Sub: - Your letter No.19/08, dt.10-2-2008.
…………
CCP404.29 18
We supplied cloth in response to your order of 10th
February and intimated to you the amount you have to pay
for the cloth through our letter mentioned in reference. But
we have not received the amount of Rs.50,000/-.

Please make the payment at an early date.

Yours faithfully,
For Krishna & Company

(KRISHNA REDDY)
Proprietor.
CCP404.29 19
Ex.4

Your two letters to collect dues from M/s.Rama and


Company, Godavarikhani have failed to evoke any
response from them. Write to remind them once again.

CCP404.29 20
Answer to Ex.4
Phone:236754
KRISHNA AND COMPANY
Near Bus Stand,
Sircilla.
Ref.No.16/08. Date:1-3-2008.
To
Ms.Simran, Proprietor,
M/s.Rama and Company,
14-1-79, Godavarikhani,
Dist.Karimnagar.
Dear Madam,
We have written two letters dated 15th and 25th
February, just to collect of Rs.50,000/- which you yourself
promised to pay in the first week of last month.
CCP404.29 21
We assume that because of your busy work
schedules you could not pay adequate attention to our
letters or they might not have been brought to your notice
at all.
We hope that you will pay the amount immediately
on receipt of this letter and you will not keep us waiting
any longer as you never did so in the past.
Thank you,

Yours faithfully,
for KRISHNA AND COMPANY,

(KRISHNA REDDY)
Proprietor.
……..
CCP404.29 22
Different states in writing Collection
Letters
Third Stage (Inquiry and Discussion Stage)

 Normally, first reminder just states the amount due and


request for payment.
 Next letters should not doubt the intention of the debtor to
pay.
 Letters should not criticize or write anything ironical about
delay in payments.
 However, from second reminder onwards, letter should
increase insistence for payment of dues.

CCP404.29 23
Different states in writing Collection
Letters

Contents of writing Third Stage (Inquiry and


Discussion Stage) Letters.

 It should refer to the intimation and first reminder.


 It should once again state the amount due and how much
time has lapsed since the due date for payment.
 It should assume that the previous letters were not either
received by the buyer or somehow escaped his attention.
 Debtor should be asked to pay the dues within a definite
time.

CCP404.29 24
Different states in writing Collection
Letters
 If debtor has not turned up to pay due amount even after
second reminder,
 If the debtor is regular in payment, more reminders sent
instead of using harsh words.
 Contents of the third reminder onwards, which are rarely
written,
 It should be almost the same as the contents of the
second reminder
 But less and less time is given for payment.

CCP404.29 25
Ex.5

• M/s.Bharath Constructors, Karimnagar completed


contract for construction of a building on the contract
given by the Managing Director, Chitra Plastic,
Godavarikhani. An amount of Rs.50,000/- is due from
Chitra Plastic, who did not give any response to any of
the two reminders written by M/s.Bharath Constructors
for collection of dues. As the Managing Director write a
third reminder to collect the amount.

CCP404.29 26
Answer to Ex.5
Phone:22312456
BHARAT CONSTRUCTIONS
14-1-71/A,
Subhash Nagar,
Karimnagar.
Ref.No.BC/10/08. Date:14-2-2008.
To
The General Manager,
Chitra Plastic,
Godavarfikhani.
Dear Sir,
Sub:- Request for payment of Rs.50,000/- due-
reminders-Reg.
………
CCP404.29 27
Three of our letters dated 1 and 20th January and 8th
February seem to have escaped your attention.
So, we once again write a remind you to remit the
amount of Rs.50,000/- which stands debited to your
account in our books.
We are hard-pressed for cash such big amount is locked up
with. This time may we ask for your personal attention in
the matter and request you to speed up remittance of the
above amount.
Thank you,
Yours faithfully,
for BHARAT CONSTRUCTIONS,

(A.VAMSHI)
Managing Director.
CCP404.29 28
SUMMARY

So far we have discussed about:

• The meaning of Collection Series.

• Different stages in writing Collection Letters.

• Contents of Collection Letters.

• It should contain reference of order, request for payment.

CCP404.29 29
QUIZ

A. The purpose of writing First Stage Letter is:

• To intimate the due amount.


• To ask for immediate payment.
• To threaten the debtor.
• To compromise with the credit customer.

CCP404.29 30
B. The purpose of writing Second Stage
Letter is:

2. To inform the due amount.


3. To request the credit customer to pay the amount.
4. To compromise with the debtor.
5. To inform him not to pay the amount due.

CCP404.29 31
C. The purpose of writing Third Stage
Letter is:

2. To threaten the debtor.


3. To ask the debtor to see the seller immediately.
4. To ask the debtor within a definite date.
5. To threaten the debtor.

CCP404.29 32
Frequently Asking Questions

2. What is meant by Collection Series? What are the


various stages of collection letter?
3. Explain the contents which are written in First Stage
Letter.
4. What the contents which are written in Second Stage
Letter.
5. Write the contents which are used in Third Stage
Letter.

CCP404.29 33
Assignment

1. Write a first letter asking for payment from your


customer

3. Write a reminder to your old customer who has not


paid his dues till now.

CCP404.29 34

Centres d'intérêt liés