Dunning Letter

 Dunning Letter

 Letter send by the sellers or supplier to the buyer or debtor reminding him to pay the due amount is called a collection or dunning letter. Now a days a large portion of business done on credit .

 According to Lesiker" The letters that are used to collect past due amounts are collected or dunning letter"

 So, the letter sent by a supplier to his customer reminding him to pay his outstanding dues, is called dunning letter. This types of letter r written to realize the dues from the debtors.

                     

Reasons for nonpayment / dues by customers

 Dunning letter are written when a substantial amount of money is due in case of credit sale. The causes /reasons of such dues are not same. This are mentioned below: 

1.The customers may forget to pay

2.Customera overlook payments because they are very busy

3.Customers can not keep track

4.Customers may have plenty of money.

5.Cuatomers will not pay because of temporary lack of money 

6.Customers may use the money for some other money 

7.Customers may think they he is entitled to take time because he places large orders                 

8.customers will pay only when frightened or threatened.

9.customers may have plenty of money 

10.Buyera prefer to keep the money in the banks instead of paying.

 From the above mentioned points we find that there are many factors / situation responsible for non payment of dues by customers.

Considering factors while writing dunning letter

There is no approach of writing a collection / dunning letter. The reasons for delay in payment are quite different from case to case & in each case the treatment to buyer also will be different. This are given below : 

1.Always assume that the debtor is sincere & not delaying intentionally.

2.The customers assets, volume of business record of paying debts in the past would help you to come to a decision.

3.You viewpoint should be used to  convince the debtor that he is to pay for his own advantages.

4.Informal & friendly approach should be used to break the ice

5.A collection letter should not to be too brief.

6.A too short dunning letter appears  to be curt.

7.Start by sending a regular monthly statement.

8.Mention the amount due in each communication.

9.The collection procedure must be adaptable to the nature of the debtor or customer .

  Finally it can be said that writing a dunning letter is really very tough. You must follow the above mentioned of the rules. Remember that you are to use diplomacy here to win your mission not to lose your customer.

The dunning process 

Dunning is not an easy process. It is acceptable to issue firm reminders & to take allowable collection process.

5 steps are mentioned below: 

Step 1: sending to a customer wither the statement of his/her account.

Step 2:Sending the 1st dunning letter.

Step 3: Sending the 2nd dunning letter.

Step 4:Sending the 3rd dunning letter

Step 5:Sending the final dunning letter

Memorandum

 Memorandum 

Memo is the short form of memorandum’s memo is a short piece of writing generally used for internal & external communication between the officers of the same level of the organization .

 From the above discussion we can conclude that a memo is a short form writing used every level of the organization.

                   

Uses of office memo 

A memo can be used for the following purpose: 

1)      To issue instruction to the staff .

2)      To give or seek suggestion .

3)      To request for help or information .

4)      To confirm a decision arrived at over telephone .

5)      To convey information .

6)      To provide response .

7)      To grant permission to do something .

8)      To seek explanation on some matter of conduct .

9)      It can also be used for future reference

The advantages  of memorandum

 Memorandum offers several advantages of an organization .some are mentioned below:

 1)A memorandum is a brief & simple media of exchanging written message 

2.Its a convenient media of writing communication 

3.No other expensive stationary needs to be used for memo as it used within the organization 

4.It serves routine purpose in the organization as it is used to exchange do to day 

5.In memo everything is written & that’s why there is no scope being disported

Disadvantages of memorandum: 

The major disadvantages of memorandum are given below: 

1.one of the major limitations of memorandum is that it has limited scope in use 

2.Memorandum is sent through peon or by post or in some cases through company’s e mail.

3.Memo is inflexible in nature.4.Memo leakage of any confidential information.

5.memo always contains single & simple issue. 

6.memo is primarily used as an internal means if communication 

7.The memo is becoming a dying method

Directions of memos 

1.Downward flow of memo: when memo moves to subordinates from superior it is called downward memo .It explains this tyeps of memo explain policy or processed.  

2.Upword flow of memo: This memos are written by subordinate from to their superior 

3.Horizontal flow of memo: When memos move from the individual to the individuals of same rank of organization level they are called horizontal memo. 

 So this is the technique of writing memo