"Dia menulis surat" can be often interpreted as "S/he writes letters". It would be more accurate if it is written as "Dia menulis sebuah surat."
Often the word "dia" shows up as "ia". Is this an informal pronoun or is there a misspelling in the question?
Dia = Ia.
'Dia' could only be used for he/she, While 'Ia' could also be used for inanimate objects, and also 'Ia' sounds more poetic.