The document outlines techniques for effective debt collection, including setting objectives, training collectors, and following a multi-step collection process involving reminders, letters, phone calls, and if needed, use of collection agencies or legal action. It emphasizes being prepared, persistent, prompt, urgent, courteous, tactful, businesslike, cooperative, and repetitive in collection efforts. The goal is to collect past due invoices, maintain cash flow, make decisions about future credit, and educate customers to pay on time.

1. COLLECTION TECHNIQUES
PRESENTED BY: SHAHNAM TAHERI
Shahnamtaheri@gmail.com
2012

2. Objectives of Collections
• Collect money from past due invoice
• Marinating cash flow of business
• Decision about giving credit to customer in
future
• Educate customers to pay their bills on time
• Negotiate effectively for the hard accounts
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3. DEPARTMENT OF COLLECTORS
Each employees should be:
 motivated
Trained(sales personnel, collectors)
Sales personnel should be trained and educated
About credit policy of their company and explain
in detail to customers at the time of making
sales.
Having the right information at the beginning is
very important.
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4. Steps in Collection
• Sending reminder and notices for past due
invoices
• Follow up by letters or collection
• Using external collection agencies and legal
actions
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5. Sending Reminder
• E-mail , fax, mailing invoices and accounts
statements summary at first stage
• Sending a firm collection letter for those
account with 60 days overdue
• Final letter to give to collection agencies and
legal action
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6. TELEPHONE COLLECTION
The call objective is to get the customer’s
commitment to pay.
GOLDEN RULE: PREPARATTION
Clear objectives of the call
Who is the decision maker, who can actually
make the payment.
Prepare for likely non-payment excuses
Plan the best time to ring
Have the correct telephone number
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7. Collections by telephone
• Two way communication
• Stress urgency for payments of past due
invoices
• Understand the customer ‘s situation
• Confirm the message is received
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8. Effective Collector
• Knows the skills of effective communication
• Has enough information about the customers’
account
• Confident, determinant, and diplomat
• Has ability for problem solving
• Knows the credit and sales policy of his/her
company very well
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9. Efficient Telephone Call
• Introduce yourself, your company name and
the reason for your call
• Talk to right person
• Tone: professional and polite but firm
• Voice: should be heard without any noise
• Clarity: Ensure you are understood
• Be diplomatic
• Emphasis for payment the past due invoices
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10. Telephone collection: Continue
• Have the name, extension number, job title or
position of customer contact
• Be away from all noise and distractions
• Have to hand invoice number,PO number, proof
of delivery
• Have the details of the last telephone contact
• Aware of any queries raised and resolved
• Do not chew or drink while you are talking
• Smile
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11. Continue….
• Having confidence and full and accurate
,updated debt information is essential.
• Collector should know his authorities during
negotiation with customer. They should aware
about company’s policies about “deals” with
some special customers.
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12. Effective Contact
• The collector should be clear how to approach
the contact : surname, title, first name
Make sure you’re talking with the right person.
You only get one chance to make a first
impression!
Any frustrations experienced in connection
must not be carried forward into actual
conversation.
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13. Effective Contact
• Have every required documents in your hand
before any calls
• Voice tone: the tone should be displaying the
firmness needed to gain commitment of the
overdue debt.
• Professionalism: Use a respectful language
• Friendliness in the voice not in jargon language
• Do not read from a set of script
• Time of the call: early morning
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14. Content of the call
When you contact with right person, it is
important you as a collector to control the
conversation and develop the dialogue.
Mention exact amount of the debt:
 At the beginning of the call
 Again during the call
 And again at the end of the call when
confirming the amount promised.
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15. Content of the call
• Ask open-end questions:
• “Where did you say you sent the cheque,Mr.
White?”
• “When you will be sending us the cheque,Miss
Black?”
Use silence at the end of each question to add
strength to the point being made.
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16. Call content
Close-ended questions
• Have you received the
merchandise in March?
• Do you agree there is an
outstanding balance of
$3,500?
Customers’ Excuses
• Listen carefully to judge the
customer’s mood to find the
real reason for non-payment.
• Acknowledge the problem in a
way that remains neutral.
• Apologize for some undone
promises.
• Develop questions to establish
that the facts are correct.
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17. Collection techniques
• Collectors should try to be consistent in
controlling the call throughout the
conversation, remain calm but firm.
• Conclude the facts:
The cheque #2225 for the amount of $3,525 is
cut and will mail by courier tomorrow, to your
company in Waterloo.
• Collector should not show any weakness
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18. During Conversation
• Be positive than critical
• Be polite
• Admit mistakes frankly if your company is
wrong
• Get the customer attention
• Get a firm commitment for payment
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19. Customers’ Excuses
• Send or fax the copy of invoice.
• The cheque is in the mail.
• We have cash problem.
• Our payment terms are 60 days or we pay in
90 days.
• Our accountant has gone for vacation!
• We are going to liquidation.
• We are waiting for our customers to pay us.
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20. Continue: Customers excuse
• Having a reorganization
• The goods were damaged.
• The owner is not here to sign the cheque.
• There is no Purchase order on invoice.
• Your sales rep agreed for 90 days payment.
• There is a postal strike here.
• The computer is down.
• We can’t pay. We have no money.
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21. WIN – WIN POLICY
• Good collector is going for something now, or
taking the customer’s proposal
• The collector uses assertive skills, not
aggressive.
• He/She will listen, question, get
clarification, and speak confidentially get
clarification.
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22. Summary
• Be prepared
• Be persistent
• Be prompt
• Be urgent
• Be courteous
• Be tactful
• Be businesslike
• Be cooperative
• Be repetitive
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23. • Proportion of debts will remain unpaid
• Some customers will not pay until they really
have to.
• Independent collection agencies(economical,
open for further trade when debt problem
resolved.
• Legal actions, litigation( The last resort)
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24. Sh_taheri@hotmail.com
Financial Analyst