1. Debt Collection Strategies
Chasing slow payers is all about nagging - about always being there, being very hard to
ignore, being polite yet very, very persistent. Professional nagging...but being nice about it
while you do.
This is the best debt collection method to adopt if you’re like most businesses who look at
their Aged Trial Balance and say “How on earth do I sort all this out?. If you want to collect
all of your unpaid invoices, quickly, try this four-step debt collection method...
1. Take a completely fresh look.
Print up a copy of your Aged Trial Balance. Take a completely fresh look at it. Become the
"new broom". Forget what’s been done before. Start all over again.
2. Conduct a “YES/NO” review.
Go through all of accounts on the printout, one by one, and simply mark those that you
don’t want to follow up right now. It doesn’t matter why. Just note any that you don’t want
to follow up.
3. Classify all accounts into one of 4 categories.
CATEGORY 1 - “The Untouchables”.
These are the “special cases” that you don’t want to follow up for whatever reason (eg
genuine hardship / someone who refers a lot of business / a relative / already with a Debt
Collector)
CATEGORY 2 - "For Special Consideration".
These are accounts where the amount of the debt is extremely large or where there's a
"story" behind the debt.
CATEGORY 3 – "Just Due For Payment".
These are the accounts where the only amounts due are current invoices. Perhaps also
include those with only a small remaining older balance, but not those with a largish older
balance. (This is where your "fast money" is.)

2. CATEGORY 4 – "Long Overdue For Payment".
These are accounts where there is more outstanding than just the current fees. (Balances
may be small.)
Remember, the aim of the exercise here is to collect as many of the outstanding fees as
possible with minimal work, in the shortest time, and with no client upset.
Step Four - Deal with each category one by one.
"The Untouchables"
- these accounts are NOT to be chased. Diarise to look at these again in one month.
"For Special Consideration"
- look at each account in this classification AFTER you've dealt with the next two categories.
(These will take a while to resolve, so that's why they're done LAST.)
"Just Due For Payment"
- send them all an email with wording like this:
Dear Sirs,
Invoice for: ABV Ltd
Our records show that we are yet to receive your payment against the following outstanding
invoice:
Invoice Date Invoice Number Amount Overdue Days
28/02/2013 SIN148186 850.00 EUR 6
For this reason, we respectfully would like to remind you to settle the balance within the next
days. Should you have any questions or comments on your account, please feel free to call or
e-mail us as per the details provided in this notification.
Kind Regards,
Velin Nikolov

3. "Long Overdue For Payment"
- send them all an email with wording like this:
Dear Sirs,
Re: Outstanding Fee Balance –EUR 450.00
During a recent audit of our accounts it was pointed out that the above balance appears to
remain outstanding.
As we are not aware of any queries and this balance is considerably overdue.If you are not in
a position to make a full payment, please contact me immediately so that we can discuss
alternative arrangements.
Kind Regards,
Velin Nikolov
Points to Note:
Try and use a name that's unfamiliar to your debtors, and, if you haven't got
someone you can use, make one up!
It works because main effort is put into where the fast money is.
This debt collection approach assumes innocence, and is very non-confrontational
The wording in the emails blames other things (the "records" and the "audit") for
following up payment