Debt collection strategies for schools

Debt Recovery – How to Recover Account Payments … Quickly, Efficiently and Painlessly Michael Todd http://opsgl.com

It’s all about Planning

The basics
Emails (stealth mode)
Statements (stickers?)
Credit Cards
A “Pay By” date on fees
Put BSB details on fees
Email SMS’s (from computer to mobile phone)
Today is about “Slow” Debt NO T “Bad Debt” PLAN AHEAD H L Menkin (outspoken social commentator early 1900’s) ... “to anybody who might send something critical to me - this is my response. I am sitting here in the smallest room in my house with your letter of criticism before me. Soon - it will be behind me.” no escape – capital letters

Sending Text Messages from computer to mobile phone http://www.smsglobal.com/en-au/ 8 cents each and replies received as an email

Why people really DO pay (7 influencing factors)
Need.
Honesty, appreciation and obligation
Conscience
Embarrassment
Fear
Physical Safety
The “How Do I Get Rid Of You” factor

How NOT to get paid A True Situation The Facts A typical School Term is 10 weeks. Collection Process Fees sent out during the second week of term. 8 weeks to go before end of term Parents have 30 days to pay. 4 weeks to go before end of term Headmasters Letter sent out requesting payment within 14 days. 2 weeks to go before end of term Term 1 fees Term 2 fees

Who will you pay - now?
pay St Andrew’s and St Peter’s $500 each?
pay St Andrew’s $1,000.
pay St Peter’s $1,000.
pay no-one - leave the country!

Six reasons behind all excuses
DISPUTE – unhappy – query – false.
CARELESS – forgot – didn’t understand.
DISORGANISED – their own books are in a mess.
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NO MONEY – the intent is there but not the cash.
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UNCONCERNED – not bothered – too busy.
DISHONEST – want to use the school’s money for something else.
3 2 1

The three golden rules
Start early.
ALWAYS be the good guy.
Be VERY hard to ignore.

Rule 1. Start early Know what you really want and will enforce . Are payment terms as tight as they can be? How soon do you send out the fees? Decide WHO you want to look after the accounts. Switch the onus from ‘Can I’ to ‘Please don’t’. Write down your procedures. Tell everyone – new and existing parents. Chase overdue accounts within a few days of becoming due if not immediately.

Rule 2. ALWAYS be the good guy
Always blame someone/something else.
‘ Thank you for telling me that .’
Write the bad news,
speak the good news.
Assume innocence.
Be surprised if payment’s not on the way.
Set up a collection hierarchy:
information gatherer.
problem solver
decision maker.

Rule 3. Be VERY hard to ignore Make collections systematic – never miss a week . The cat The 9 year old Anything inside one of your envelopes Phone, Fax, Email, Letter, sms, Business Cards, Statements if you HAVE to Phone about ANYTHING …. Handwritten plain envelopes Write to the home address on a Thursday

You’ve just got to get their attention Handwritten envelopes Hi John, Please contact me. Cheers, Fred. Handwrite on selected Statements Use coloured stationary for Statements Highlight overdue amounts

Good morning Mrs Jones.
It’s Gwen Iveer from St Andrew’s.
I’m doing the accounts today.
It looks like we haven’t got payment for this term’s fees yet. Has it already been sent or is it on the way?
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But, if THIS is how you feel DON’T PHONE! The First Telephone Call

Telephone Skills
Core Telephone Skills
Use body language.
Listen.
Allowing parents to “save face”.
Take Notes.
Always get a ‘Here By’ date.
Core Telephone Rules
Never assume a reaction
Never use emotion.
Never leave more than two phone messages
If you know the outcome before you call, don't call, write.
“ I know. I know !”

Telephone Skills
For debtors with a dispute
don’t argue
speak softly
‘ Thank you for telling me that’
'I see ...'
'Is there anything else'
Sneaky Tricks
Phone about anything else.
Phone, get distracted, leave a message
Don't feel like phoning? Then don't! Write, text message or get someone else to call.

“ I can’t afford the full amount ”
If a parent tells you that they can’t afford the full amount owing, would you say or do anything different from any of the following?
Well, how much CAN you afford?
Come in to the school and we’ll talk about it.
I need at least half.
I need the full amount now, nothing less will do.
Can we come to some sort of an arrangement?

How To “tidy up” the existing situation
Classify all accounts into four categories:
The untouchables.
For special consideration.
Just due for payment.
Long overdue.

It’s time for The Role Play from Hell

More Resources This entire PowerPoint presentation will be available on the web next week. Please email me at mlt.opsgl.com for its url. Try a few searches here – many telephone phrases, email and letter templates can be found in the blog. This Free Report expands on some of the points made today. .. or revert to old technology, phone me or drop me an email!

Debt collection strategies for schools

by michael todd on Jan 31, 2011

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Debt collection strategies for schools — Presentation Transcript