Cancel or Withdraw a Customer's Credit Account • Example Letters and Guides
Explain your reasons for withdrawing the customer's credit option, using a courteous tone. You may want to maintain this customer's business, even if you must ask for cash payments from now on.
How to write this credit letter:
- Inform the customer that payment is past due. State when it was due and indicate the amount.
- Inform the customer that you are canceling the credit account.
- Offer an alternative plan for your customer to make payments and continue to do business with you.
- Thank the customer for past business and express your good wishes for his or her future.
Example Letter #1
I have reviewed your account with Doe International and note that it is 90 days past due.
The payment of $500.00 you promised two months ago still has not been received. Consequently, I must inform you that I have closed your credit account with us.
Doe appreciates your doing business with us and hopes that we can continue on a cash basis while you resolve your delinquent balance. I hope we can continue to have good associations. I wish you well.
Example Letter #2
We are sorry to inform you that we must close your charge account with Doe Department Store because of a consistent record of late or missed payments. In 2018, your payments in February, May, and July were more than 15 days late, and payments in March and October were missed entirely.
Perhaps you are having temporary financial difficulties that have created the present situation. Because of your long relationship with our store, we prefer to resolve the problem with you directly, rather than refer the account to a collection agency. Please contact the customer service department at 555-5555 and speak with Jane Doe about arranging a new payment schedule.
We hope that we will be able to work together to correct this credit problem and restore the good relationship our store has had with you for so many years. Doe Department Store appreciates your patronage, and we look forward to serving you in the future.
Example Letter #3
Upon review of your accounts receivable file, I see no alternative but to suspend your credit line with us. Your balance has been more than 30% over your credit limit for 60 days, and we have not received a payment in that time.
While your credit privileges have been suspended until the account balance is brought within your credit limit, we will happily continue sales on a cash basis. In addition, our accounts receivable officer, John Doe, will be glad to help you design a workable payment plan to keep your balance manageable.
Your business has been very important to us, and we hope to continue our relationship well into the future. We wish you the very best during this difficult time.
Example Letter #4
It is with regret that we must inform you that we will no longer be able to ship supplies to you on credit. As a small company, we are unable to carry balances of over $1000 for more than 60 days.
However, we will continue to send you materials COD. We appreciate your business and hope we can continue to supply you with the products you need. If you have questions about this letter, please contact John Doe at 555-5555.
Write Your Letter Step-by-Step
1 Inform the customer that payment is past due. State when it was due and indicate the amount.
Sentences for Step 1
- When reviewing your account, we found that you still owe us the $300.00 that you promised to pay two months ago.
- Your account balance of $720.00 has been overdue for five months.
- We at the Doe Corporation understand how difficult a financial setback can be, and have been generous in overlooking many of your late payments in the past. However, in reviewing your account this quarter, we have discovered that you have missed your last two payments.
- As the accompanying statement reveals, your account balance of $950.00 is four months past due and our records indicate that you have not made any payments for sixty days.
- You are probably aware that you have exceeded your credit limit by $300.00. This amount was due three months ago.
- We have enjoyed serving your company for the last year and regret telling you that your account balance of $30,000.00 has been past due since January 20.
Phrases for Step 1
- above your credit limit
- according to the terms agreed upon
- are unable to
- as the accompanying statement shows
- as you know
- failure to make payments
- has been past due since
- has been overdue for
- has remained above
- have missed your last two payments
- have done our best to
- have exceeded your credit limit
- have enjoyed serving
- have been more than generous
- late and missed payments
- must inform you that
- no longer meet our criteria for
- no payments have been made
- our records show that
- payments have been irregular
- regret to inform you
- the past-due amount is
- when reviewing your account
- your account balance is
2 Inform the customer that you are canceling the credit account.
Sentences for Step 2
- We regret that we are no longer able to do business on a credit basis.
- We regret that we must cancel your credit account.
- Due to your failure to pay your account balance, we are forced to close your credit account.
- Because you have been unable to make consistent payments on your credit account, we will need to make other arrangements with you to pay for our services.
- Because of these problems, we must reconsider your payment options and cancel your credit account.
- Effective immediately, we must discontinue your company's credit account.
- We hope that you will understand that we can no longer extend credit to your company.
- Our future dealings will have to be on a cash basis.
- We regret the necessity of canceling your credit account.
Phrases for Step 2
- are unfortunately unable to
- are obliged to close your
- as of March 1
- can no longer continue to
- can no longer extend
- close your credit account
- have reluctantly decided to
- hope that you will understand
- in the best interests of
- make other arrangements
- much to my regret
- must cancel your
- no longer meet our terms for
- no longer qualify for
- our continuing relationship
- pay your account balance
- regret to inform you
- to best serve your needs
- will take effect immediately
- withdraw your credit line
3 Offer an alternative plan for your customer to make payments and continue to do business with you.
Sentences for Step 3
- Please call our office so we can discuss a more suitable payment plan.
- We are eager to help you clear up this matter. Call us so we can set up a plan for you to resolve this debt.
- Although we are discontinuing your credit account, we would still like to serve your needs on a cash basis.
- We will, however, be happy to continue to serve you on a cash basis.
- We are aware of your current financial situation and will be happy to work with you towards getting your account paid in full as soon as possible.
- We will be happy to continue to provide you with our services on our standard terms of cash in advance.
- We must ask that all new orders be paid for prior to delivery.
Phrases for Step 3
- a more suitable arrangement
- are willing to arrange
- as soon as possible
- ask that you come in
- be paid for prior to
- clear up this matter
- continue to do business with you
- continue to serve your needs
- eager to help you to
- from this time on
- happy to work with you
- invite you to discuss with us
- make appropriate arrangements to
- must request payment in full upon
- on a cash-only basis
- set up a payment plan
- so we can discuss
- to meet at your convenience
- to be paid in cash
- while you settle your account
- work out a more suitable
- would like to continue
- would be happy to arrange
4 Thank the customer for past business and express your good wishes for his or her future.
Sentences for Step 4
- We have appreciated your business in the past and hope that you will find financial success in the future.
- We do not want this problem to leave any bad feelings between us. Please be assured that we appreciate your business and wish you well.
- Thank you for your business. It has been a pleasure serving you.
- We are grateful for your understanding.
- Let us know when you have overcome your present financial difficulties.
- We would be happy to resume our business relationship on a cash basis.
- We have appreciated doing business with you and hope this matter will be resolved soon.
Phrases for Step 4
- appreciate your business
- assure you that
- best wishes for the future
- grateful for your understanding
- has been a pleasure serving you
- have appreciated your business
- have enjoyed doing business with you
- hope that you will
- hope to continue to
- hope you will find financial success
- in the meantime
- let us know when
- look forward to the time when
- on a cash-only basis
- overcome your present difficulties
- please consider us again
- please let us know
- resume our business relationship
- satisfy our credit requirements
- sure you will understand
- thank you for your business
- thank you for the opportunity to
- trust that you understand the need for
- will be happy to
- wish you well
- wish you success in resolving your financial difficulties