This document provides tips for collecting debts from overdue customers. It recommends (1) charging late fees to deter late payments and send a message about firm credit policies, (2) taking immediate action when payment is due by contacting the customer to understand non-payment, and (3) being firm but friendly to build rapport and find mutually agreeable solutions rather than antagonizing debtors. It also stresses the importance of persistence through regular contact, coming prepared with information about the customer's account, using phone calls as the primary collection method, and listening to understand reasons for non-payment in order to work towards a resolution.

1. Dont let thugs kill your customers
Basic debt
collection tips
1. Chargea late fee on your invoices.
This is more a tip to help prevent bad debt but it’s a golden tip and it’s what we tell
all our clients to do. Advise your customer that you will charge them interest and/or a
recovery fee for any late payment. This will deter them from being late in the first
place and it will send a strong message to your customers that you have firm credit
practices in place.
2. Immediate Action.
Your debt collection should start the day the payment becomes due. Someone in
your company should be calling or e-mailing the customer and asking for payment
on the last day of your credit terms to find out why the account is not paid. Do not
wait to start your collection effort. The longer an account remains unpaid, the less
likely you will be successful in collecting the debt. Our recovery rate also goes down,
the longer you wait to outsource to an agency.
Be careful not to use thugs called seizers who might ruin your business for ever
3. Be firm but friendly.
Yes, it sounds obvious, but you catch more flies with honey than you do with vinegar
and it is so true in debt collection. Get on side with the debtor and find out how you
can work in with them, not against them. You can be assertive as well as friendly.
4. Be persistent.
This basic debt collection tip is what most debt collectors miss. One phone call or e-
mail will not get you paid; you need to be friendly yet persistent.. Have a system that
will send automatic e-mails or phone calls or short messaging service (SMS) on a
regular basis. Try some software, such as Debtor Daddy or Chaser.
5. Be prepared.
As we always say, knowledge is power. Before you make your call, find out as much
as you can about the possible reasons why payment has not been made. Think
about possible excuses you might hear from the debtor and come up with your
response before you pick up the phone. Plan what you want to say so you will not
forget anything important.

2. 6. Nothing beats the good ol’ phone call.
While letters, emails, SMS, etc. are all good tools to use in debt collection, the
majority of any collection effort should be done by phone. Let us face it: you have
already sent your invoice by email and it’s been ignored, so don’t repeat what has
already been done. Get on the phone. Have a dedicated accounts receivable person
who can make these calls on a regular basis each week.
7. Listen.
Done asking for the payment? Stop talking and listen for the response. Give your
customer a chance to explain. Work with them to get to a win-win scenario. Once
you understand the reasons for non-payment, you will be far better prepared to work
with the debtor until payment is received.
-------------Humantalents International
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