Tips To Help Collect Past-Due Invoices
When trying to recover unpaid bills from customers, it is very important to ensure the approach taken in your debt collection effort is neither too aggressive nor overly-lenient. In some cases, maintaining a positive relationship with the customer is desirable, and more care should be put into the collection approach used. However, when a customer is delinquent often enough to warrant ending future business ties with them, a more aggressive collection effort can be employed. Either way, here are some tips to help improve your collection success:
- While demand letters and emails are certainly useful in debt collection efforts, the telephone should be used as the primary mode of contact between collector and debtor. It is very easy for a debtor to misplace a letter or simply throw it in the trash, and if they are receiving multiple emails each day they may simply never see it in their inbox.
- Explain exactly why you’re calling and let them know that the bill is important and should be among their top priorities. If you are a debt collector with a collection agency, say so. Wasting time with small talk or beating around the bush will only annoy the debtor and gives them the opportunity to distract you from the purpose of your call. Be specific about the bills that are late and try to get to the bottom of why the customer isn’t paying.
- Don’t simply force them into promising payments. If you demand without relenting, customers may begin promising payments they can’t afford just to get you off the line and stall you another week. By finding out the reasons they haven’t been paying, it will be far easier to come to a payment agreement that works for both sides and, more importantly, the debtor can realistically agree to pay.
- Try to think ahead and anticipate how the debtor will react to what you tell them. If you can stay a step ahead of them, it is much easier to fend off excuses and get a payment faster. Don’t be caught off-guard by a debtor’s response; do your homework and know all the info about the past-due invoice you are collecting on. If necessary, have the debtor’s file on-hand so you can quickly access the information you have about the account.
- Most importantly, in all debt collection efforts it is incredibly important to maintain a calm and collected composure during phone calls. Getting upset at a customer or arguing with them rarely breeds positive results. Don’t let the debtor walk all over you, but be sure to never harass or threaten a debtor over the phone or in any communications. These collection means don’t breed results and are illegal in almost all debt collections.
Employing these tips in your debt collection efforts can very quickly and easily improve the amount of money you successfully collect, and increase the cash flow of your business without much extra work.
Be sure to check out our article on Tips For Successful Debt Collections.
About The Author:
Dean Kaplan is Principal at The Kaplan Group. Dean's expertise is widely recognized in the debt collection industry. His advice has been published in a number of industry newsletters such as Credit Today and InsideARM and he is a frequent speaker at industry events.