In the last six months, I’ve repeatedly heard “we’ve never had a problem with bad debts until now.” Here are some tips:
  1. Be deliberate about your credit policy. Identify high-risk customers, and mitigate that risk wherever possible. Use up-front payments, personal guarantees, co-signors, accrued interest and liens.
  2. Start early. Amex sends me an electronic notice 5 days before the payment is due. Below, you’ll find some letters that may help.
  3. Memorialize everything. Write a note to the file anytime you speak with a debtor: who, what, when, where, why? Also, send a letter to the debtor after every meaningful conversation. Something like “as we discussed, you agreed to send us $5,000 now and the remaining balance in 30 days.”
Sample letters to your customers: INITIAL LETTER TO YOUR CUSTOMER 
Dear _____:
This letter is a friendly reminder that payment on your account 
in the amount of $________ was due on ________.   
If you have already sent us your payment, kindly disregard 
this letter.   If not, please send us your payment promptly.
Yours truly,
FOLLOW UP LETTER TO YOUR CUSTOMER 
Dear _____:
This is our second reminder that payment on your account in 
the amount of $________ was due on ________.  We value your
business and hope to keep you as a customer.   
However, we do require payment according to the terms of 
our invoices. Please send us your payment promptly.
Yours truly,
FINAL LETTER TO YOUR CUSTOMER 
Dear _____:
This is our final reminder that payment on your account 
in the amount of $________ was due on ________.   
If we do not receive payment in full by _____, 
we will submit your account for collection.
Yours truly,