A payment demand letter is considered to be a wise option to send to a client that has consistently ignored warnings and requests from your design firm regarding payment. The payment demand letter acts as a last effort to recoup payment and a form of warning that if the client does not make payment or agree on some acceptable compromise then you will deal with the matter in court or mediation as stated in your working agreement. Since the payment demand letter should initiate successful negotiation of disputes, design firms should use a payment demand letter in hopes of settling the matter easily.
How to Write a Payment Demand Letter
When writing a payment demand letter, one needs to focus on the issue and past history of the dispute so that authentic data and information can be provided to the client. The client must be informed clearly that if he fails to fulfill the obligations as requested in the payment demand letter then he might be taken to mediation to recoup any money owed.
Tips on writing a payment demand letter are as follows:
•While you are demanding something that is your legal right, ensure that you are not too harsh or overly reactive. Don't attack the other party personally or blow things out of proportion. In the end, you have legal rights to protect your interests. Focus on that aspect alone in this letter.
•Send typed or printed letters; avoiding hand written letters. Make sure you keep records of the sent copy with yourself for future reference.
•You can ask for specific amounts of money on fixed dates so as to ease the pressure on the client. Be flexible but ensure your interests are not compromised again.
•Lastly, you have the option for filing a lawsuit and state this fact very clearly in payment demand letter.
Once you write a payment demand letter, the intensity of your warning increases. The threat of legal action in case the client fails to make payment definitely makes him aware of the possibility of any legal action. A payment demand letter has very often been successful and it is certainly a wise thing to do before one prepares to file a lawsuit against the client whose account is deficient. I hope you never need this, but if you do, you now have the document that can hopefully bring a bad situation to an end.