Marcadis Singer PA are debt collection attorneys, our practice is focused exclusively on all matters concerning the collection of money that is owed to individuals and businesses. An often forgotten source of financing is the rapid collection of receivables. If your small business is in need of collection services to help grow your business, don’t hesitate to call.
2. Virtually every operating business requires some kind of debt collection, which is
just part of doing business. Customers might find it more challenging in the current
economy to pay off their debts. If invoices aren’t being paid in a timely manner,
hiring a commercial collection agency might be a good idea to help collect those
outstanding debts. Commercial collection agencies are experienced professionals
when it comes to business to business debt collection. Similar to any industry,
there are effective and ineffective ways to carry out debt collections. Below are
some effective approaches to increase the success of debt collections.
3.
4. Prior to making the first contact with a customer in arrears, be
fully prepared and know every detail about the customer’s
account. Have copies of all contracts and invoices handy
along with any other info that will help you communicate in a
knowledgeable, personal and professional manner with the
customer.
Be Prepared
5. Document Everything
Whatever you discuss with the customer regarding outstanding debt, be sure to
take copious notes, particularly what the customer says about what they will do if
there is a dispute about future debt. Does your company use tracking software? If
so, while the conversation is still clear in your head, be sure to update the system.
Keep the file up-to-date as further details come to light
6.
7. Don’t Assume
When performing your first debt collection call, it is vital to clarify if the debt hasn’t
been paid already. Don’t push the customer away as there might be a possibility
of doing business with them again in the future. The debt might not be debt at all
and could have been an accounting error and no collection is actually required. At
this point, you should approach carefully with your words and tone. Hear the
customer out and be sure to accurately and carefully document the conversation.
8.
9. Be Nice and Show Self-Control
Your tone will dictate if your conversation will be a success or not. Starting off in a
friendly, non-confrontational manner will ultimately get a positive response from
the customer. When you have the person who is responsible for paying the
invoice on the phone, ask them if you can help in any way. Do they need more
info? A caring approach is important. Hear what your debtor has to say and you
probably won’t have to put them on the defensive. Do not take the situation
personally. Your ultimate job as a debt collector is to get the debt paid in full as
quickly as possible.
10.
11. Don’t Confront or Manipulate
Is there a legitimate excuse for your debtor not paying their bill? Find this out
early. For instance, did they blame their late payment on someone else not paying
them? Confirm this by getting in contact with the other person. Really listen to
what they are saying to you. Do you get a sense they are telling you the truth?
Listen to your gut feeling, it is usually right.
12.
13. Don’t Harass
If the debtor becomes abusive during the conversation, try to keep calm and
suggest that you can call them back at a later time. Whatever the situation, listen
to what the customer is saying very carefully and keep the conversation as
positive as possible. It is vital that the debtor feels that they are moving towards a
solution.
14.
15. Provide Alternatives
Is the customer finding it difficult paying off the debt? It could be possible for them
to pay it off over time. Try to come up with a payment plan that works for your
client and the customer. The end game is to have the customer pay the full debt
as fast as possible. Provide options and listen to what the customer says carefully
until a solution is found.
16.
17. Review The Terms
If a repayment plan has been reached, go over the plan verbally with the debtor.
The summary should include exactly when the payments will be sent in by the
customer and what method they’ll be using for the payment. This should be
followed up in writing via letter, fax or email. Ask the customer to notify you when
they have sent in the payment.
18.
19. Maintain Open Communication
Maintain open communication with the debtor, even if they are unable to pay right
away. They might be able to pay fairly soon and by keeping an open
communication with them, you might even find a way for them to start paying
much sooner. It is usually more difficult to collect older debts, however, the
debtor’s situation could change and they might be able to pay.
20.
21. In Conclusion
In tough economic times, debt collections are fairly common and applying these
techniques will improve your chances of success. If this approach doesn’t produce
the results you want, it might be time to employ the services of a collection agency
or collection attorney with a good reputation.
