How To Collect Debts

"The man who is in debt carries a world of trouble." - Burke.

HOW TO COLLECT DEBTS.

Pay as you go, or a strictly cash business, is the best and safest method of doing business.  But certain conditions or customs in trade make this sometimes impractical or impossible and credit must be given.  Under this method dishonest, careless or unfortunate people contract debts, then refuse, neglect or are unable to pay them, and collections, peaceable or forced, become a necessity.

The requisite steps to collect such debts are a matter of great importance and should be understood by everybody, but they are not, and much unpleasantness and heavy losses are often the result.

Methods by Which Debts are Contracted

Goods are bought on credit, to be paid for at a definite or indefinite future time.  Labor is employed, to be paid for at certain periods.  Lands, houses and other property are purchased under contract of future payment.  Money is borrowed, under notes, mortgages or other securities, and many other transactions in business and trade call forth occasions or present temptations to contract debts.

Suggestions for Avoiding Debts

1. Do a Strictly Cash Business. — Better small profits and quick sales, than large profits and long credits.

Mark your goods as low as possible and adhere unswervingly to your cash principle. This is best for buyer and seller. It avoids collections and prevents losses. It saves the time and labor of keeping accounts. This enables the seller to sell cheaper and the buyer to buy for less than on credit.

2. Cautions. — Goods sent abroad should be paid for before the purchaser takes possession.

The time of credit should be as short as possible and the bills collected when due.  When working for others collect your wages weekly or monthly, in accordance with the agreement to pay, unless your employer is quite responsible, thus making your dues safe.

In renting lands or houses, a duplicate lease should be made, one for each party, the rent paid promptly when due, at the house or business place of the landlord, and the payment credited on the back of the lease.

In receiving or making payments, a receipt should always be made out; it is a voucher and may save trouble.

Hotel and boarding-house keepers cannot be too prompt and strict in collecting their dues, as their customers are mostly transient, making forced collections sometimes impossible.

Never loan money without requiring a note or a duebill, if the amount is small; this is safest even between the most trusted friends.

When the loan is large, have the note secured by a mortgage on real estate; but see to it that the same is not encumbered by previous claims, which would render your security worthless.  It is safest to require an abstract of title and then have your mortgage recorded immediately.

This precaution should also be observed where a chattel mortgage is taken on personal property.

If a small amount of money has been loaned without security and it can apparently not be collected without legal process, it may be best to drop the matter and consider the loss so much paid for a lesson in business prudence.

First Steps in Making Collections 

These depend very much on circumstances.  The debtor may have met with reverses or a misfortune, rendering him unable to pay at the time specified, and deserving of patience, others may be careless and need a sharp reminder, a third party, inclined to be dishonest, may need close watching.  Thus discretion is necessary as to the form and tone of the letters requesting payment.

The composition of a letter requesting payment of an account is often a perplexing task, particularly if the person or firm is capable of paying, but careless about it. Such a letter, to be perfect, must not only obtain the money due, but do so without giving offense. Such letters should not, as a rule, be blunt or abrupt, but should courteously and clearly state the reasons for the request. If it becomes necessary to suggest placing the account in the hands of a collector, the suggestion should not be put in the form of a threat but in such language as will show your reluctance about using such means.

Generally speaking, a statement of the debtors account is usually all that is necessary to remind him that payment is expected when due.

If necessary to request prompt payment, something similar to the following may be used:

                                                                                             New York, N. Y.,  May 1, 1916.

Mr. D. C. GOWAN,
         Oswego, N. Y.

Dear Sir:—Inclosed please find statement of your account for April, which we trust you will find correct.

We would appreciate it if you will kindly check same at your earliest convenience and send us a N. Y. Draft for the amount.

Yours truly,

Smithson & Dewsnap.

If the debtor is tardy a second request might be worded as follows:

Mr. J. G. Homes,
          Newark,  N.J.

Dear Sir:— We respectfully call attention to your account, which is now some time past due, and ask if you cannot favor us with your check by return mail.

or

Not hearing from you regarding the amount of your account, now past due, we take the liberty of drawing on you at three days' sight, and trust that you will kindly honor the draft when presented.  
Thanking you in advance, we are,           Yours truly, 
                                                               Connor & Blaine. 
 

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Examples of Writing A Business Letter.

EXAMPLES OF BUSINESS LETTERS

Letter containing a Remittance

Canton, Ohio, Feb. 10, 19-

MESSRS. WILLIAMSON & CATON,

                                                   Williamsport, Pa.

Gentlemen:-- Enclosed please find N.Y. Draft for Sixty-five Dollars ($65.00), in settlement of your invoice of January 13th, which you will kindly and return.

                        Yours truly,
                              PETER SCHRADER.

                

 Letter Acknowledging Above

                                                                     Williamsport, Pa., Feb. 12, 19-

MR. PETER SCHRADER,

            Canton, Ohio.

     Dear Sir: Yours of the 10th inst., containing N.Y. Draft for sixty-five Dollars ($65.00), came to hand this morning.
     We enclose bill properly receipted, and wish to thank you for prompt settlement of your account.

                       Yours respectfully, WILLIAMSON & CATON.

 Letter Ordering Goods

                         120 Penn St. Scranton, Pa., May 1, 19-

MESSRS. GEO. M. HILL & Co.,

        110 W. Jackson Blvd., Chicago, Ill.

    Gentlemen: Please ship by freight over the Penn. Line the following books:

     50 copies Handy Encyclopedia, Cloth Binding

     10 copies Handy Encyclopedia, Half-Morocco Binding

     27 copies The Business Educator, Cloth Binding

     13 copies The Business Educator, Morocco Binding

     10 copies Bible Symbols, Cloth Binding

  Enclosed you will find P.O. money order for Fifty-seven Dollars ($57.00) in payment of above. Kindly ship as promptly as possible, and oblige.          Yours for success,

EDWIN LEWIS, Agent.

Calling Attention to Error in Invoice

Hamilton, Ohio, Jan. 27, 19-

MESSRS, DAVIS & HOLT,

    Cincinnati, Ohio.

Gentlemen:-- I find in checking your Invoice dated the 10th inst. for shipment of biscuits that you have overcharged me 15 cents per box on the plain sodas.  I herewith return said invoice and ask you to kindly send me a corrected one.

Respectfully,

 JAS. DOYLE.

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Writing Business Letters, Continued; Opening Letters; Rules for Writing a Postal (Postcard).

 

Opening Letters

Letters are properly opened by inserting a knife or other convenient instrument under the flap at the end and cutting across the top of the envelope.

SOME SPECIAL POINTS IN BUSINESS LETTERS.

1. Be brief and to the point without being blunt or offensive.

2. Be courteous in your requests and polite in your demands.

3. Never write a letter with a lead pencil; always pen use and ink.

4. Avoid the use of flourishes.

5. Blots and errors due to slovenliness are inexcusable.

6. Avoid interlining; rather rewrite your letter.

7. Aim to write as legibly as you know how.

8. Never discuss or refer to matters of a social nature in a business letter.

9. Never write a letter when angry or vexed.

10. Write on one side of the sheet only.

11. When requesting information always enclose stamp for reply.

12. If your letter contains money or an enclosure always state the amount, or what the enclosure is.

13. Take a copy of all letters containing matters of importance. It may save you trouble.

14. Be prompt in acknowledging the receipt of a business letter, mentioning its date.

15. Never write an anonymous letter; it is the coward's weapon.

16. See that your letters are divided into paragraphs and properly punctuated.

17. Write as though your correspondent was at your side and you were talking to him.

18. Letters ordering goods should state plainly the articles wanted, giving full directions for shipping, and the name and address of the person ordering.

19. Money should be remitted by draft, P.O. order, express order or registered letter.

20. Money orders or other enclosures should be folded in the letter; not put in the envelope separately.

21. Do not use figures in the body of a letter, except to denote sums of money, dates, street or P. O. box numbers.

22. Do not forget to sign your name. 

23. &c means “and so on in the same manner.” Etc. is entirely different and means “and other things.” Use them only in their correct sense.

24. In requesting payment of money due you, avoid being offensive. Remember, it is better to have a person a friend, than an enemy.

25. Do not mix up an order for goods in the body of a letter. Either use a separate sheet, or make it a separate part of your letter with only one style or kind of goods on a line.

26. Use care and neatness in addressing your envelope, and if writing a number of letters be sure that John Smith's letter does not go in Tom Brown's envelope.

27. Never write a dun, or any matter of importance, on a postal card. To make a threat of any kind on a postal card renders it unmailable, and to use indecent language thereon is a criminal offense, under the laws of the United States.

28. A prompt acknowledgment of the receipt of an order for goods is a commendable practice.

29. Avoid abbreviations and the use of postscripts.

30.  Never write a threatening letter; in most of the States it is made a criminal offense by statute.

RULES FOR WRITING A POSTAL

1. A card should be dated either on the upper right-hand corner, or on the lower left-hand corner.

2. Always sign your name in full.

3. If you wish an answer, give your full post office address, unless it is well known by the person to whom you are writing.

4. Never write a demand or a request for on a postal. It is disrespectful to the person receiving it.

5. Never write an invitation on a postal. Society prescribes polite forms for this purpose.

6. Do not important matters to a postal card, for it is open to inspection, and the law does not provide for its return to the writer if it fails to reach its destination.

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