1. R.S.Patwardhan

2. Skill Enhancement Tools for Executives
responsible for recovery of outstanding
payments (Receivables) from Debtors
Golden rule in business is to collect
money owed to you faster than you
have to pay out money you owe to
others to avoid a cash flow crisis

3. For most people, making collection calls could be a dreaded
aspect of their job profile. It takes them out of their comfort
zone. They don’t feel confident with the process, due to
fear of embarrassment or failure.
“Every artist was first an amateur.”
― Ralph Emerson
For most people, making collection calls could be a dreaded
aspect of their job profile. It takes them out of their comfort
zone. They don’t feel confident with the process, due to
fear of embarrassment or failure.
Here’s some good news. You can become more
comfortable and more successful by following a few
tips from collection professionals. While there’s no
surefire method of debt collection, these tips will
increase the chance of success

4. "Success is where preparation and opportunity meet."

5. Be Cautious, Be Vigilant …
 Chances of recovering a debt - directly linked to age of the debt.
 Older a debt - less collectible it is - especially if it is > 90 days
 Best debt recovery strategy is to get on top of unpaid invoices as
early as possible and chase them up.
 Chances of recovering a debt - directly linked to age of the debt.
 Older a debt - less collectible it is - especially if it is > 90 days
 Best debt recovery strategy is to get on top of unpaid invoices as
early as possible and chase them up.

6. Three most common ways of collecting debts are:
 Personal Visits
 Telephone Calls
 Written Communications and Reminders
 Personal Visits
 Telephone Calls
 Written Communications and Reminders

7.  Personal visits / face to face conversations are the most
costly (in terms of time away from your core activity), but
also the most effective form of debt collection.
 A visit to Customer’s establishment creates an opportunity
to look and listen to tell-tale signs:-
- Informal chat with receptionists and others can be quite
revealing
- Observing if the business look s busy and well managed
- Does the customer avoid you?
- Does the customer look trust worthy?
 Personal visits / face to face conversations are the most
costly (in terms of time away from your core activity), but
also the most effective form of debt collection.
 A visit to Customer’s establishment creates an opportunity
to look and listen to tell-tale signs:-
- Informal chat with receptionists and others can be quite
revealing
- Observing if the business look s busy and well managed
- Does the customer avoid you?
- Does the customer look trust worthy?

8.  Although a telephone call is not as effective as a
personal visit, it is a direct, fast and more cost-
effective method of debt collection.
 It is superior to letter writing or reminders because
it creates an opportunity of making personal
contact and developing a customer relationship.
 Although a telephone call is not as effective as a
personal visit, it is a direct, fast and more cost-
effective method of debt collection.
 It is superior to letter writing or reminders because
it creates an opportunity of making personal
contact and developing a customer relationship.

9.  Sending letters and reminders of overdue debts is the
most common form and easy option of debt collection.
But being relatively impersonal, it's also the least
effective.
The tactic is likely to work with customers who intend to
pay you anyway and need just a prod to dust off the
cheque book), but is relatively ineffective with habitual
late payers.
 Sending letters and reminders of overdue debts is the
most common form and easy option of debt collection.
But being relatively impersonal, it's also the least
effective.
The tactic is likely to work with customers who intend to
pay you anyway and need just a prod to dust off the
cheque book), but is relatively ineffective with habitual
late payers.

10. Arm Yourself with Facts
 Exact amount owed
 Terms of sale
 Products/services purchased
 Payment due date
 Other open invoices, even those not yet past due date
 Is your business at fault? Were the correct services supplied?
 Is the invoice right? Have you overcharged? Has the invoice been disputed?
 Has any colleague spoken to the client (and possibly upset them)?
 Is the client/customer a regular? Do they usually pay on time or late?
 Has the customer attempted to reduce the debt already?
 Has the customer attempted to explain the situation to another colleague?
Arm Yourself with Facts
 Exact amount owed
 Terms of sale
 Products/services purchased
 Payment due date
 Other open invoices, even those not yet past due date
 Is your business at fault? Were the correct services supplied?
 Is the invoice right? Have you overcharged? Has the invoice been disputed?
 Has any colleague spoken to the client (and possibly upset them)?
 Is the client/customer a regular? Do they usually pay on time or late?
 Has the customer attempted to reduce the debt already?
 Has the customer attempted to explain the situation to another colleague?

11.  Identify and speak to the actual person responsible for paying
the account.
 Aim to keep handy a record of the previous conversation,
including any agreed action
 It is important to let the person feel the urgency of settling the
bills, in a reasonably friendly conversation
 Do not be harsh. Remember that many businesses are able to
overcome temporary cash flow problems. Assess the situation
in advance while planning a customer specific strategy.
 Identify and speak to the actual person responsible for paying
the account.
 Aim to keep handy a record of the previous conversation,
including any agreed action
 It is important to let the person feel the urgency of settling the
bills, in a reasonably friendly conversation
 Do not be harsh. Remember that many businesses are able to
overcome temporary cash flow problems. Assess the situation
in advance while planning a customer specific strategy.

12.  There is no magic bullet in debt collection.
 It is important to realize that every debtor is different.
 What works really well with one, may get you nowhere with another.
 Contact the right person. Do not let the debtor refer you to other people to engage
you in a fruitless merry-go-round.
Handling difficult debtors requires patience, skill and
perseverance. Following Tips would help improve the
effectiveness of the collection calls
 There is no magic bullet in debt collection.
 It is important to realize that every debtor is different.
 What works really well with one, may get you nowhere with another.
 Contact the right person. Do not let the debtor refer you to other people to engage
you in a fruitless merry-go-round.

13.  Be proactive: Follow up before due date for payment may help avoid non-payment.
Ask if everything was satisfactory and if the invoice, including the payment due date,
is accurate or if there are any questions.
 Be prepared: Gather and have in front of you as much information about the
customer and the debt, including the file and all the invoices. Document everything
including the customer’s feedback, in case there are any disputes. Engage the
customer in a positive dialogue and have that clean piece of paper to scribble notes.
 Be nice, but in control. Don’t be manipulated, avoid confrontation.
 Stay calm, even if the person called gets abusive. Suggest calling them back at
another time.
 Listen to what the customer is or is not telling you.
 Be proactive: Follow up before due date for payment may help avoid non-payment.
Ask if everything was satisfactory and if the invoice, including the payment due date,
is accurate or if there are any questions.
 Be prepared: Gather and have in front of you as much information about the
customer and the debt, including the file and all the invoices. Document everything
including the customer’s feedback, in case there are any disputes. Engage the
customer in a positive dialogue and have that clean piece of paper to scribble notes.
 Be nice, but in control. Don’t be manipulated, avoid confrontation.
 Stay calm, even if the person called gets abusive. Suggest calling them back at
another time.
 Listen to what the customer is or is not telling you.

14.  Be Ready to handle Excuse/s. Take time to compile a list of common Debtor excuses
matching them with effective rebuttals, like a few examples below:-
Customer: The cheque is in the mail.
Collector: Great! May I have the cheque number, amount and date it was mailed , so I
can ensure it is posted correctly?
Customer: I have a cash flow problem right now.
Collector: I understand that times are difficult. Can I set you up on a payment plan, or
can you make at least a partial payment today?
Customer: I don't have a copy of the invoice.
Collector: I'll fax the invoice over right now. Will you be mailing the check today?
Exchange ideas with colleagues to generate an exhaustive list of excuses and
rebuttals.
 Be Ready to handle Excuse/s. Take time to compile a list of common Debtor excuses
matching them with effective rebuttals, like a few examples below:-
Customer: The cheque is in the mail.
Collector: Great! May I have the cheque number, amount and date it was mailed , so I
can ensure it is posted correctly?
Customer: I have a cash flow problem right now.
Collector: I understand that times are difficult. Can I set you up on a payment plan, or
can you make at least a partial payment today?
Customer: I don't have a copy of the invoice.
Collector: I'll fax the invoice over right now. Will you be mailing the check today?
Exchange ideas with colleagues to generate an exhaustive list of excuses and
rebuttals.

15.  Address the debtor by name throughout the conversation. This shows respect and
commands their attention. Be careful not to over do it to avoid it being annoying.
 Be firm, make it clear that you expect payment for the products or service the debtor
has purchased from you. You have fulfilled your side of the contract by providing the
services and goods and you have every right to expect payment for it.
 Be focused. The debtor may try to divert you from the problem on hand by
discussing personal stories or making innumerable excuses. You must keep a tight
rein on the conversation at all times, and bring it back to the purpose of the meeting
- to collect payment or get a commitment for the payment.
 Address the debtor by name throughout the conversation. This shows respect and
commands their attention. Be careful not to over do it to avoid it being annoying.
 Be firm, make it clear that you expect payment for the products or service the debtor
has purchased from you. You have fulfilled your side of the contract by providing the
services and goods and you have every right to expect payment for it.
 Be focused. The debtor may try to divert you from the problem on hand by
discussing personal stories or making innumerable excuses. You must keep a tight
rein on the conversation at all times, and bring it back to the purpose of the meeting
- to collect payment or get a commitment for the payment.

16.  Don't eat or drink when you're on the phone
 Speak a bit slower and enunciate
 Use a lower pitched voice.
 Pause more often.
 Smile while you talk – During a telephonic conversation, although the person on the
end of the line can't see it, they will hear it; and everyone responds more openly to a
smile than to a scowl
 Don't eat or drink when you're on the phone
 Speak a bit slower and enunciate
 Use a lower pitched voice.
 Pause more often.
 Smile while you talk – During a telephonic conversation, although the person on the
end of the line can't see it, they will hear it; and everyone responds more openly to a
smile than to a scowl

17.  Tactfully Interrogate the debtor on the excuses made for not paying the debt. Asking
lots of questions forces the debtor to come up with believable answers and in the
barrage of stories, the truth can just slip out. Persistent questioning makes debtors
uncomfortable as they have to keep coming up with more lies to support their
excuses. Avoiding a repeat of such interrogation prompts debtors into settling the
payment.
 Nail things down. A collection call that doesn't result in a commitment from the
debtor is a wasted call, if we can't get them to commit to payment in full, get a
promise of something -- a partial payment or a call back with a payment date. Don't
ask, "When can you get back to me on this?" Rather, ask "Will you be calling me by
Wednesday?"
 Tactfully Interrogate the debtor on the excuses made for not paying the debt. Asking
lots of questions forces the debtor to come up with believable answers and in the
barrage of stories, the truth can just slip out. Persistent questioning makes debtors
uncomfortable as they have to keep coming up with more lies to support their
excuses. Avoiding a repeat of such interrogation prompts debtors into settling the
payment.
 Nail things down. A collection call that doesn't result in a commitment from the
debtor is a wasted call, if we can't get them to commit to payment in full, get a
promise of something -- a partial payment or a call back with a payment date. Don't
ask, "When can you get back to me on this?" Rather, ask "Will you be calling me by
Wednesday?"

18. Suggested Openings which focus the conversation on the debt problem. Adapt them to
suit your requirements. Be respectful by addressing the person as Sir, Madam or
suitable.
"Just following up on our service while we have a quiet moment. Were the invoices we
sent you correct and all of them listed on the statement?
(If the Debtor Says “Fine). Can you tell me when we can expect payment?“
 "Our ledger shows that you were due to pay us Rs. ------ by last month. I'm sorry to
trouble you, but our accountant is asking us to look into all of these matters. Have
you posted us a cheque, or can I arrange to collect it?“
 "You don't often pay this late. How can we help each other? We don't like stopping
your credit because we value your business, but the company policy has to be met.
So, how can we sort this out?”
Suggested Openings which focus the conversation on the debt problem. Adapt them to
suit your requirements. Be respectful by addressing the person as Sir, Madam or
suitable.
"Just following up on our service while we have a quiet moment. Were the invoices we
sent you correct and all of them listed on the statement?
(If the Debtor Says “Fine). Can you tell me when we can expect payment?“
 "Our ledger shows that you were due to pay us Rs. ------ by last month. I'm sorry to
trouble you, but our accountant is asking us to look into all of these matters. Have
you posted us a cheque, or can I arrange to collect it?“
 "You don't often pay this late. How can we help each other? We don't like stopping
your credit because we value your business, but the company policy has to be met.
So, how can we sort this out?”

19.  Good systems and procedures prevent debt problems. Actively
manage debt collection.
 Take precautions while giving credit to a customer.
 Practice a personal approach.
 Get on top of problems early - don't let the problem escalate
beyond your control.
 Try to maintain a good relationship with the debtor. If you can assist
them through a temporary problem, they are likely to remain loyal
in the future. Persistence is your best weapon.
 Remember to write everything down and send a copy to the customers, to
keep track of agreements reached so that you can follow up later.
 Good systems and procedures prevent debt problems. Actively
manage debt collection.
 Take precautions while giving credit to a customer.
 Practice a personal approach.
 Get on top of problems early - don't let the problem escalate
beyond your control.
 Try to maintain a good relationship with the debtor. If you can assist
them through a temporary problem, they are likely to remain loyal
in the future. Persistence is your best weapon.
 Remember to write everything down and send a copy to the customers, to
keep track of agreements reached so that you can follow up later.

20. “Winning is a Habit. Unfortunately
so is losing”
― Vince Lombardi

21. This presentation is based on real time experience of the presenter and internet
resources