How to Create a Collection Letter for a Tax Business

By Lanee' Blunt

A letter of notification is the first stage in the collection process for a tax business. It is used to keep the business relationship with the client and the tax professional and when it is time for more tax business they will remain a client. In most cases, a client will give you no trouble in making a payment, but occasionally they won’t pay and you should send a notification letter. When someone owes you money for your tax business and doesn’t want to pay in response of your regular billing, then you may begin writing letters of notification.

Moderately Challenging

Things you’ll need
Client contact information

Send copies of past bills. The tax business can start in the early stages of the process by sending repeated bills to the client.  On the bills stamp reminder to indicate that you are giving them the opportunity to pay you. Write a polite letter urging the recipient to make payment on the outstanding bill.

Start the notification letter with a double space under the salutation.  In this paragraph list the overdue balance that is owed to the tax business, the invoice number, and date. Remind the client that you have not received payment for tax services you performed. The most common request is that the client has lost the invoice.

Start your second paragraph double space in between the first paragraph informing the client in a respectful tone assuming there has been some mistake resulting from lack of payment. For example, “I felt sure that your payment would be here by now. Please send the payment by mail so that you can continue to receive the tax services you’ve been receiving.” The letter should not sound too harsh because there is another stage of “severity of letters” that follows the notification letter.

Close the letter. With a friendly but firm tone that the payment should be mailed before you can continue any future work for the client. If the payment has already been mailed please ignore the letter.

Mail the letter and if you don’t hear anything within two weeks, send another letter.  Rather than losing an account from decline of payment it’s better to send letters of notification to your tax customers.

“Accounting Best Practices”; Steven M. Bragg, 2010


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