What Needs to Be Included in a Debt Recovery Letter For SMEs?

An unfortunate part of business is chasing up unpaid invoices from customers who have either forgotten or are refusing to pay what they owe you.

Where it gets especially unfortunate is when the customer continues to refuse to pay. When this happens, you will need to write a debt recovery ‘letter before action’. UK law requires the creditor to send this letter to the debtor as the first step in the debt recovery process.

Getting such a letter right is important as you want to achieve your aim with as little friction – and legal action – as possible. It is also vital that the letter contains all of the necessary information so that you are able to take the next step toward debt recovery, should the customer continue to not pay.

To help with writing the letter before action, UK legal administrators can help you with all of the necessary legal documents to ensure all guidelines are followed correctly.

Here, we explain the guidelines that must be followed.

Inform The Debtor Of The Debt

First of all, the letter will officially inform the debtor that they owe your business money in a formal, professional, and straightforward manner without antagonising them.

Include Debt Details And Proof Of Debt

The letter must include the date by which the debt needs to be paid to avoid further action. Proof of the debt such as invoices should be included as legal debt recovery is not possible without it.

Include Payment Methods And Repayment Plan

Clearly state the acceptable payment methods in the debt recovery ‘letter before action’ to prevent the debtor from attempting to pay in unacceptable ways, such as with cash.

If the money owed is significant enough to warrant repayment in multiple stages, then you should establish an acceptable payment plan process that they must follow.

Inform The Debtor Of The Next Action

The debt recovery letter before action should include information regarding what the next action actually is. This includes legal proceedings if the payment is not made by the specified date, or if they have not responded within 14 days of the letter.

Finally, make sure the full contact information of your business and any relevant employees is clearly included.

Hire Pride Legal Debt Recovery

Our esteemed legal administrators here at Pride Recovery a ready to be here for you and your business, and help you recover your unpaid debts for only £60 per case. Contact us today at 01733 229466 or click here to get started on your claim.


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