Collection Tips
The following is a list of items and tips you can use to analyze your current internal procedures. These internal procedures coupled with our proven collection system will get you well on your way to improved profitability, and better relations with your customers.
1. Have Clearly Defined Credit and Collection Policies
- Who does and does not get credit
- Upfront Terms; C.O.D., 10 days, 30 days, Etc…
- Welcome Letter
- Agreements with Signatures over handshakes and promises
- Outline Work to be done
- Detail Costs associated
- More effort up front, less effort later
- Request Payments at time of service
- Get a signed credit application with all requested information: name, address, phone numbers, references, etc.
2. Invoice Promptly and Bill Consistently
- Be Consistent in your efforts
- Do not be sporadic in billing
- Consider every 2 weeks instead of monthly
- b. The more relaxed you are, the more the customer is
- c. Customer service/invoice follow-up
- How are things?... and by the way…
- Use Address Service Requested
- Have a systematic follow-up plan
- Know what to do and when…no guessing
3. One Size Does NOT Fit All
- Different industries have acceptable procedures
- Certain clients may require exceptions to your policies
- Know and detail terms up front
4. Train Staff Properly
- Fine line between customer service and collection
- Always be courteous and never raise the tone
- Follow all state and federal laws (FDCPA) "http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf"
- Businesses fall under many of the same guidelines
- Admit and correct any mistakes immediately
5. Consider Outsourcing or Using American Profit Recovery Party Sooner
- 2 Step vs. 3 Step approach
- Early Intervention is key in recovering bad debt
- A 3rd Party collection agency can be more diplomatic
- Flat Fee low cost (often times less than working internally)
- Often times more effective than internal efforts
- There is a Psychology to collecting bad debt
- Can Eliminate or reduce number of accounts that would go to traditional collection agencies or attorneys
6. Just Let Go…!!!
- Even if you have the best procedures in place some will not pay
- There is a time and place for collection attorneys or agencies
- In the end you may have to possibly write-off some past due accounts
- No need to continue to spin your wheels
