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Stop Being Too Nice – Send a Letter of Demand & Get Paid in 7 Days

I think you’ll agree with me when I say:

It’s REALLY hard to get paid once a customer decides to ignore you and they enter ghost mode 👻.

Or is it?

Well, it turns out you can dramatically reduce the time to get paid by sending one simple Letter of Demand…

…a letter which got my invoice which was overdue by 63 days paid the same day

And in today’s post, I’m going to show you why a Letter of Demand is SUPER powerful…and exactly how you can easily use one for your own business.

Stop getting friendzoned by your customers

You need to STOP being too nice to your customers.

In business, being in “The Friend Zone” can seriously kill your cash flow (and your profitability).

Talk to anyone who has owned a business before, and they will tell you that cash flow is a MASSIVE challenge. If you want to continue growing your business, you have to master your cash flow.

Here’s the thing:

Being friendly with your customers doesn’t always get you paid. Polite reminders and friendly emails don’t always work (trust me 😀).

Sometimes you need to turn up the heat.

If customers know you’re serious, they’re far more likely to pay. They want to get you off their back!

What’s the solution?

If you’re trying to collect debts, a Letter of Demand is the secret weapon in your arsenal…

letter of demand debt graffiti

What is a Letter of Demand?

A Letter of Demand is a formal request for payment of an outstanding debt.

If someone owes you money, you can send a demand letter as a final step before taking further legal action.

The letter clearly states the amount owed, the date it was due and what you will do if you do not receive payment within a set timeframe.

Don’t let people get away with not paying you! 

There are a few good reasons why you should try sending a Letter of Demand yourself before commencing legal action:

1. You might be able to recover your debts for free before you spend money on a lawyer or debt collector

2. It gives people another opportunity to pay you

3. The warning can encourage debtors to pay their debts because they see you are serious

4. It provides written proof that you have tried to resolve the dispute fairly and have given them a chance to respond.

letter of demand cash

How do I write a Letter of Demand?

First, gather all of the details you will need. 

Confirm the name, address and contact details of the person or business who owes you money. You must address the letter to the right person/business. Also confirm the total amount oustanding, the due date and the goods/services you provided.

Double-check any invoices, contracts or correspondence relating to the debt. You should attach these as evidence when you send the Letter of Demand.

Once you have gathered all of the details, you’re ready to draft your letter. 

You might want to use a Letter of Demand template to save time and make sure you have the right structure.

Your letter should include:

  • A clear demand for payment
  • All relevant details for the debt (amount, due date, invoice #)
  • A time limit before you take further action
  • Your bank account details
  • The next steps you will take (including legal action) if payment is not made

Send It - and get paid faster

If a customer is ignoring you or keeps breaking promises for payment, you need to get tough.

Time to SEND IT.

A Letter of Demand is a great way to show them you are serious and aren’t going away.

The best part?

You can do it yourself without having to pay for a lawyer.

You can send the letter several ways, but the main thing is you need to make sure they RECEIVE it. 

We recommend you send the letter via Registered Post so you can get proof of delivery from Australia Post. 

You can also send via email with a Read Receipt, but this is not as reliable, and emails are easier to ignore than a letter.

The final option is a process service firm such as Polo CPI. They will attempt to ‘serve’ the letter to the recipient in person. Yep, just like you see in the movies.

YOU GOT SERVED! 

post letter

How long should I wait for payment?

Your deadline for payment should be between 7-14 days.

You want to create a sense of urgency and force them to act fast. 

If you’re sending a Letter of Demand, you have probably been waiting for at least 30 days already. You’ve given them plenty of time to make payment already, so don’t stretch things out any longer than you need to.

Put the onus back on them to meet the deadline.

letter of demand

Still not paid? What are the next steps?

OK, you’ve sent your Letter of Demand and nothing happened.

Now what?

You’ve got four main options to consider:

  1. Talk to a lawyer
  2. Pass the debt on to a debt collector
  3. Issue a Statutory Demand and pursue them in Court. Each State/Territory has a small claims court (e.g. QCAT for Queensland)
  4. Write off the debt
 

Decide if it’s worth your time, money and sanity to keep going…

scrunched receipt

Should I use a lawyer or Debt Collector to send a Letter of Demand?

No, you don’t have to. 

There’s no reason why you can’t write a Letter of Demand yourself to try and collect a debt.

Of course, if that doesn’t work, THEN you might want to refer the debt to a lawyer or debt collector to take things further.

One benefit of engaging a lawyer or debt collector is that it will be sent on their letterhead, which may scare your customer into action.

However, on the flip side, there are costs involved and no guarantee of success.

bank-account-starting-a-business

When should I give up and write off the debt?

Ever heard the saying “to throw good money after bad”?

Some people will pursue a debt to the end of the earth because of the “principle”.

Don’t be one of those people. 

Lawyers lick their lips when they see “principle people” coming.

Take the emotion out of it and consider the situation in cold, hard business terms.

If the amount of money or prospects of success is low, it might be worth calling it quits.

Conclusion

Don’t forget, nice guys finish last.

Sometimes you need to turn things up a notch to achieve results in business. Friendly reminders and polite emails don’t always work.

A Letter of Demand is a brilliant way to get paid faster and force your customers to take you seriously.

Need a Letter of Demand Template?
We've Got One!

Visit our Shop and grab it today.

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