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Collection Letters For Professional Accounts

( Originally Published 1918 )



Professional Credits

The accounts considered in this chapter are those of the doctor, the lawyer, and other callings in which similar conditions are found.

The lawyer is supposed to extend credit on a purely business basis. He may charge cash in advance, or may absolutely refuse to undertake a cause. He is usually under no compulsion to extend credit. His collection problems are therefore comparatively simple. The physician, on the other hand, cannot, speaking generally, re-fuse calls for professional assistance. If men are sick or wounded, it is his duty to relieve their sufferings as far as it is within his power; and the financial consideration is supposed to be secondary. Professional ethics do not always carry the physician as far as this, but it is a fact that the question of credits is largely beyond his control. His collection problems are, as a natural result, difficult and troublesome.

Physicians' Accounts

Extending credit so freely as he does, the physician must necessarily accumulate many bad accounts—accounts that are absolutely uncollectible and really might as well be written off the books before they are brought on. He also brings many poor accounts on to his books from which something may be derived by careful watching, but which rarely if ever yield their face value. Many other accounts are worth their full value if they are properly taken care of, and still others—for the solace of the physician—are gilt-edge accounts upon which he can depend almost as absolutely as if the cash were in his hands.

The fact that the physician's patients are his friends adds to the perplexities of his collections. He knows each one of his patients—usually more or less intimately—and it is difficult, if not impossible, for him to press these friends for payment as he might if they were strangers.

Also, the importance of keeping his "customers" is greater for the physician than for the tradesman. The physician cannot advertise as the tradesman does. It is a slow and painful process to build up his practice, and every patient gained is a continuing, and usually a considerable, asset. The loss of even a single good patient is therefore somewhat in the nature of a calamity; and the physician's clientele must be handled tenderly.

Because of these conditions, and because physicians are frequently unbusinesslike in their habits, their, collections are apt to lag. Accounts ordinarily run for months and not infrequently for years—sometimes, in-deed, for many years—before they are actually settled up. Whether this somewhat extreme indulgence is really necessary is for the physician to judge. He knows the financial condition of his patients, knows how strong his hold is upon them, knows what they can and should pay; and, if he does not get what is coming to him, it is his own fault.

Just how closely the physician should collect and just how direct his requests for money should be, is for the individual to decide. Where a doctor stands high and has a strong hold on his patients, he may collect as closely as he chooses, and, as soon as his patients become accustomed to his methods, they will fall in line without a murmur. It is but seldom, however, that the physician adopts the practice of close collections.

Collection methods in the country and city will, of necessity, differ. The country doctor depends largely upon personal collection of his accounts. In his rounds it is a simple matter for him to ask the head of the household—or whoever holds the purse-strings—in a friendly way that cannot possibly give offense, if something can-not be paid on account, citing any one of a dozen reasons to soften the request and make it seem an entirely incidental matter. If the patients are able to pay, it is difficult for them to refuse; and in such cases they usually pay—with as good grace as may be—the smallest amount they think the proprieties will permit.

With the city doctor, and those of the larger towns, personal collections are not always feasible; and it is here that the statement and the collection letter are more important and more frequently used.

Physicians in the larger cities usually render monthly bills. In the country they frequently render bills only when they need money. Between times both creditor and debtor rock along in the friendliest fashion without the question of money coming up at all.

Where collections are not made personally, the statement is the physician's mainstay. With good customers these go out month after month without comment, save perhaps an occasional mild endorsement on the bill, "Please Remit." Patients who are good pay send in at their convenience. They may take their time to send in, but they do send in. Others who are good, or fairly good, are frequently careless and need some little urging.

In the physician's collection letter the personal element enters largely. His patients, as stated, are usually his friends, and he cannot write them as otherwise he might do. On the other hand, while he cannot usually press for payment, his letters are apt to be much more effective than those of the business man, because of the personal relations of doctor and patient. The patient may give no attention to the doctor's first letter requesting payment—in fact, he may let several such letters pass by unheeded. There is, however, always latent in his mind the conviction that at some future time he may need the doctor again and need him badly; and sooner or later this results in a payment. The patient who can completely ignore his doctor's collection letters and then come to him again for professional treatment without payment or promise of payment, must be a hard case indeed.

In the ordinary collection letter it is frequently inadvisable to plead the need of money as a reason for asking payment. The physician need not hesitate to allege this condition. Professional men are—or used to be before the present high cost of living obtained—proverbially impecunious. Also, from the patient's point of view, it makes but little difference—save in fashionable circles—whether his doctor is financially "well fixed" or the re-verse. The prime requisite is professional ability, and so long as the doctor can cure his physical ailments, the patient does not care whether he comes for the purpose in an automobile, in a "one-horse shay," or afoot. There-fore, the need of money—which is the most convenient excuse for asking payment is freely open to the physician.

The following letters are adapted for an account that is not much overdue :

LOUISVILLE, Ky., June I, 1913.

MR. ROBERT L. MONTFORT,
318 Seventh Street,
Louisville, Ky.

Dear Mr. Montfort:

My monthly bills fall due tomorrow and are unusually heavy. I find I am a little short on the amount required to meet them. Can you let me have $25, to reach me not later than tomorrow? If so, I shall greatly appreciate your kindness.

Yours very truly,

JOHN H. MORTON.

Another form of letter is as follows:

Dear Mr. Harris:

As you probably know, I am always short of money, but I find myself a little unusually hard pressed just at present. Can you let me have $25 or $30 on account? If so, it will help me out nicely and I shall appreciate your kindness.

Yours very truly,

..........................

In the following letter the request for money is made a little more pointedly :

Dear Mr. French:

Can you let me have $25 or $30 on account? I am, as usual, in need of money and have to look to my friends for help.

Yours very truly, ..........................

Another form is given below:

Dear Mr. Willis:

I am badly in need of money. Can you let me have $25 or $30 on account not later than tomorrow? An answer by bearer will be greatly appreciated.

Yours very truly,

..........................

A more picturesque letter is as follows:

Dear Mr. Howland

I am apprehensive of trouble and turn to you for help. My wife has purchased a new spring outfit and the bill comes in tomorrow; and, with the inconsequential financial recklessness of the sex, she has promised it will be paid at once. She says this is economical because she secured a material reduction for cash. This may be true, but it leaves me to meet the bill. Can you help me out?

A check for $25 or $30 would be a "very present help in time of trouble."

..........................

Another form of letter is as follows :

Dear Mrs. Farnsworth:

Unless my exchequer is replenished very shortly, the "bairns" will be going barefoot, not to mention more direful possibilities. Can you relieve my necessities? Twenty-five or thirty dollars could not be better applied.

Yours very sincerely,

.......................... Other forms follow:

Dear Mr. Clark:

I am unexpectedly called to Cincinnati for a consultation and find myself a little short of funds. Can you let me have $50 on account? If so, please send it to me by bearer and greatly oblige

Yours very truly, ..........................

Dear Mrs. Wilson:

I wonder if you cannot let me have $35 or $40 on account. I have some very heavy bills to meet within the next few days, and it is going to tax my resources to raise the money. For this reason I shall appreciate a remittance greatly.

Yours very truly,

Dear Mrs. Johnson:

The butcher, the baker, the candlestick maker and several other individuals of similar tendencies are after me with bills, and I lack the wherewithal to silence their importunities. Can you let me have $75 or $80 on account? If you will do this, it will be. an appreciated kindness.

Yours very truly,

Dear Mrs. Hughes:

As you know, I am chronically hard up, but at the present time I am a little harder up than usual. Can you not make a payment of $25 or $30 on account? If you can, it will be quite a help.

Yours very truly,

Dear Mrs. Brooks:

You were kind enough to let me have a payment on account last month, and I should not come to you again so soon were it not for a recent disaster at our house—not remotely connected with our dining-room maid and Mrs. Warfield's best dinner-set—which is too much for the present condition of my exchequer. Even a small remittance will be appreciated, and I sincerely trust you can come to my relief.

Very sincerely,

When letters such as these fail to produce results, the matter becomes puzzling. A doctor does not wish to offend his patients, nor does he wish to lose his money, nor to wait for it indefinitely. On the other hand, it is obvious that a patient who does not pay at all is not worth keeping, and the sooner he is offended and transfers his unlucrative practice to some other physician, the better. As long, however, as there is hope of financial return, the patient is to be handled carefully. The following letters, while somewhat more urgent than those already given, should not be offensive:

LOUISVILLE, Ky., July 2, 1913.
MR. ROBERT L. MONTFORT,
316 Seventh Street,
Louisville, Ky.

Dear Mr. Montfort:

The last time I needed money I asked you to help me out, but you were, I presume, unable to do so at that time. I have struck another hard place and come to you again. Can you let me have $30 to tide over? If so, you will be a friend indeed.

Yours very truly,

.........................

Dear Mr. Harris:

I am badly in need of money, and in looking over my accounts I see you have not made me a payment for a very considerable period. Can you not let me have $25 or $30 within the next day or two? If you can, it will be quite an accommodation.

Yours very truly,

Dear Mr. Alexander:

I am sorry to come to you again for money, but you will remember the last time I wrote you were unable to pay anything on account, and I am therefore hoping that you will be able to do something now. Please drop me a note and let me know what you can do, or, better still, send me a check. Yours very truly,

..........................

My Dear Mr. Jones:

I wrote you a month or two ago to see if you could not make me a payment on account, but the markets were then going the wrong way and you were unable to come to my assistance. I am again in "straitened circumstances," but this time am glad to note that the markets are buoyant. Can you square up with me to the extent of $75, or even $5o if the wave of prosperity has not really reached you yet? It is a case where every little helps.

Yours very truly,

Dear Mrs. Andrews:

When I wrote you last month for a payment on account, you said you would certainly let me have $30 or $40 this month. When may I expect your check? I have several obligations coming due within the next few days and should be glad to have your remittance, if possible, to help meet them.

Yours very truly,

..........................

Dear Mr. Rollins:

When I wrote you in January you were unable to let me have a payment on account, but thought you could within a month or two. I sincerely trust you are now in a position to do this, as a remittance could not come in at a better time.

Can you not let me have a check for the amount due—$70? Yours very truly, ..........................

Dear Mrs. French:

I dislike to annoy you by repeated requests for money, but, as you know, the demands on a physician are many and cannot be avoided. I should, therefore, greatly appreciate a remittance. Even so small an amount as $40 would be very acceptable.

Yours very truly,

..........................

Dear Mrs. Wilson:

I am again needing money and come to you for help. Would it be too much of a strain for you to pay the entire balance now due—$6$ ? I should like to get this full amount if you can possibly spare it, but, if not, send what you can.

Yours very truly,

Dear Madam:

It is always unpleasant to ask for money, and I am sorry to write you again, but have heard nothing from my last letter. The balance on your account is small. Can you not send me a check for the entire amount? Yours very truly,

If friendly letters are ignored or bring no response, it is for the physician to decide the next step. If the patient is at all desirable he can continue writing pleasant letters from time to time until payment is made, or he can pay a friendly visit and do some collecting "on the side"; or, if he can find a tactful collector, he can put the account in this collector's hands.

If, however, he does not think this is worth while, he can write more insistent letters, or turn the account over to a collector, regardless of whether this collector is tactful or otherwise, or put it in the hands of an attorney for collection, or do all of these.

His letters at this stage will differ but little from other collection letters. The excuses for writing are usually dropped and the letters merely demand payment of the account. The following letters are of this general nature :

Dear Madam:

Your account is long overdue. I have written you several times asking for payment, but have not pressed the matter. I must now insist upon payment and shall expect to receive a remittance from you by return mail.

Yours very truly,

..........................

Dear Sir:

For some reason you have seen fit to ignore my letters asking for a settlement of your account. Your conduct in the matter has been both discourteous and unbusinesslike, and I must insist upon an immediate settlement. I should be sorry to proceed to extremes, but if I do not hear from you by the loth, I shall place the account in the hands of my attorneys for collection.

Yours very truly,

..........................

Dear Sir:

The amount of $30 due me on your account has been dragging along for nearly a year and I have received nothing but promises of payment. I cannot wait longer. Unless you remit by return mail, or fix a date in the near future on which you will remit, I shall be forced to proceed to extreme measures.

Yours very truly,

..........................

Dear Sir:

You have promised several times to pay your account in part at least, but up to the present time have done nothing else but promise. The account is long overdue and I am tired of waiting. You must either remit by return mail or I will place the matter in the hands of my attorney.

Yours very truly,

..........................

Dear Sir:

The amount of $30 for professional services has been due for over a year. Your many promises of payment have failed entirely. I do not see any reason why I should wait longer, and, unless you send me at least a part of the amount due before the end of the week, I shall place the matter in the hands of my attorney.

Trusting you will not force me to this disagreeable alternative, I remain

Yours very truly,

.............................. Lawyers Accounts

The collection problems of the attorney are comparatively simple. As already stated, his credits are within his own discretion. He usually knows whom he is trusting, and either secures enough in advance as a retainer to make himself fairly safe, or knows that the account is good, or at least thinks the prospect is good enough to justify his taking a chance.

In any event, he does not devote much time to collection letters. What letters he writes are usually to the point and are frequently summary. The accounts are already "in the hands of an attorney," and the creditors usually realize this fact, and, unless they are execution proof, comport themselves accordingly.

Attorneys usually receive a retainer at the time they undertake business, and, in addition, have an understanding as to when payments are to be made, and then hold their clients to the agreement. 'Where there is no under-standing, bills are sent at the time the work is completed, or, where the work is continuing or long-drawn out, from time to time as the attorney thinks proper.

In a few cases where attorneys write collection letters, they are, as stated, simple and to the point. The following will serve as examples:

NEW YORK, June 15, 1913.
MR. HENRY SMITH,
95 Broad Street, New York City.

Dear Sir:

There is a balance due on your account of $75, which we should be glad to have settled. Will you kindly send us a check for the amount?

Yours very truly,

WESTCOTT & BURLINGAME.

Presumably this brings the desired remittance or some response. If not, the following letter might be sent:

NEW YORK, June 22, 1913.
MR. HENRY SMITH,
95 Broad Street,
New York City.

Dear Sir:

We Wrote you on the 15th asking for a settlement of your account, but have heard nothing from you. Will you kindly send us your check by return mail or advise us if there is any reason that prevents your so doing?

Yours very truly,

If no response is received to this letter, the "guilty party" is probably called up on the telephone and a very pointed conversation ensues. If for any reason this is not desirable, the following letter might be written:

NEW YORK, June 25, 1913.
MR. HENRY SMITH,
95 Broad Street,
New York City.

Dear Sir:

We have not been favored with a reply to either our letter of the 15th or the preceding letter of the 22d, nor have we had the remittance in settlement of our account asked for. If we do not hear from you by the 27th, We shall bring suit for the amount.

Yours very truly,

WESTCOTT & BURLINGAME.

If this does not produce the desired results, the first papers of a suit should be drawn and served upon the delinquent debtor. This will add costs to the amount of the attorney's bills; and, unless the debtor is entirely collection proof, he will not let the matter go so far. If he is collection proof, the attorneys should have known this fact before they took the case, and they should either have secured a sufficient retainer to cover the whole matter, or have clearly recognized the fact that they were taking chances. In this latter case they have no cause of complaint if they are unable to collect.

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