More Tips For Successful Debt Collection
If you’ve been reading our blog, you probably already saw our recent post with tips for debt collection. Today’s post will provide some more tips to help your collectors work more efficiently, allowing your business or collection agency to reap the greatest benefits from your collection efforts. Here’s some more advice for your debt collectors, especially in commercial debt collection (business to business or B2B collections):
- Never make contact with a debtor without preparing what you want to say. Be sure you have all the paperwork you’ll need to prove the debtor owes the debt, review important dates and think about how you want to phrase what you’re going to say in a way that is professional and clear. Failing to prepare for a collection call often allows the debtor to take control of the conversation and stall the collection process with much greater ease.
- Once you make contact with the debtor, be sure to find out specifically who will be responsible for paying the bills. During your first call, ask to speak to the business owner or whoever is in charge of paying bills and get a name and contact number for that person. Oftentimes, business owners will attempt to stall the collection process by telling you to call the bookkeeper, who will then tell you to talk to another department head, and so on. If you find yourself in this situation, demand a specific person and consider implementing deadlines to encourage the business to send you to the right person.
- Be willing to work with a debtor if they cannot afford to make payments. As we explained in our earlier post, forcing a debtor into a payment plan or agreement that can’t possibly be fulfilled doesn’t benefit anybody. Find out the extent of a customer’s financial woes if cash-flow is the reason for non-payment, and then work with them to come up with a realistic and agreeable payment plan. This may require you to wait a few months before reassessing the situation; if you demand payments without mercy from a customer who can’t pay now, they’ll be far less likely to want to work with you when they have resources available in the future.
- When accepting a promise to pay, be specific about everything. Ask the debtor to provide you with a specific date payment can be expected, and the exact amount they plan to send. By requesting specifics, the debtor will know you take the matter seriously and at the same time they understand that you’re keeping a close eye on the progress of the account. If payment isn’t received by the date promised, or if the amount is less than specified, contact the debtor immediately and find out what went wrong. If you’re dealing with a debtor who has broken payment promises in the past, a reminder call a few days before the due date is also appropriate.
- One of the greatest mistakes a debt collector can make is failing to take notes of communications with debtors. Note-taking in collections entails much more than simply noting down dates when payments are promised. A good debt collector notes aspects of the debtor’s personality, tactics that work and don’t work, every piece of information regarding payments, reasons the debtor hasn’t paid already, etc. By keeping detailed notes on all collection efforts, a collector will always be better prepared when contacting the debtor, and if another collector has to work on the account (while the original collector is on vacation, for example), they’ll be far better equipped to make progress on the account knowing what’s already been discussed.
Of course, there is no sure-fire strategy for debt collection; every account is different and some debtors will simply refuse to pay without being sent to court. However, following these tips can significantly improve the effectiveness of your debt collection or credit department.
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.