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This letter can be used when a customer is far enough behind in payments that you take the significant step of holding a new order.
This letter is intended to notify a customer when an order is put on credit hold. The hope is that the recipient will not close its account and take its business elsewhere.
- Customers occasionally overreact to credit holds. However, most customers understand the collection process and recognize that they have to pay the penalty from time to time for delaying payments to their suppliers.
- This letter is intended to make it as easy as possible for customers to remit.
- Note that no specific commitment has been made to the customer that, if the past-due balance is paid, the order pending will be released on open account terms. It would be a mistake to make such a commitment. Suppose an offer to release on receipt of payment was made in writing. In theory, the customer could remit payment 120 days later, just prior to being placed for collection, and then demand that the order be released.
- If any account becomes significantly past due, you should determine whether the account is still creditworthy before resuming shipments.
- Salespersons normally have a vested interest in seeing that an order is released from credit hold. Therefore, they may be willing to participate actively in helping collect the delinquent balance.
- This letter should be sent via email or perhaps fax to save time.
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