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Bad Debt Collection Tools
Internal Processes
At American Profit Recovery, we believe that education plays an important role in helping you improve your collections. We can provide consulting and training on your internal processes to empower you to maximize your cash flow and reduce your bad debt. The following is a list of items that you can use to analyze your current internal procedures. Of course you can always contact us to schedule a consultation.
1. Have Clearly Defined Credit and Collections Policies
a. Who does and doesn’t get credit?
b. Terms? C.O.D., 10 days, 30 days?
c. Welcome Letter
d. Signatures over handshakes
i. Work to be done
ii. Costs associated
e. More effort up front, less effort later
f. Ask for Payments at time of service
g. Get a signed credit application with all requested information: name, address, phone numbers, references, etc.
2. Invoice Promptly and Bill Consistently
a. Consistent in you efforts
i. Do not be sporadic in billing
ii. Consider every 2 weeks instead of monthly
b. The more relaxed you are, the more they are
c. Customer service/invoice follow-up
i. How are things?... and by the way…
d. Use Address Service Requested
e. Have a systematic follow-up plan
i. Know what to do and when…no guessing
f. Why do you do what you do?
i. The definition of insanity… doing the same thing over and over and expecting different results
g. Use aging sheet, not feelings
3. One Size Does NOT Fit All
a. Different industries have acceptable procedures
b. Certain clients may require exceptions to your policies
i. Know that up front
4. Train Staff Properly
a. Fine line between customer service and collections
b. Follow all state and federal laws (FDCPA)
i. Businesses fall under many of the same guidelines
c. Admit and correct any mistakes
5. Consider Outsourcing or Using a 3rd Party Sooner
a. 2 Step vs. 3 Step approach
b. Diplomatic 3rd Party
c. Flat Fee low cost (often times less than working internally)
d. Often times more effective than internal efforts
e. Psychology to collecting money
f. Eliminate or reduce number of accounts that would go to traditional collections agencies or attorneys
6. Just Let Go….!!!
a. Even if you have the best procedures in place some will not pay
b. There is a time and place for collection attorneys or agencies
c. Possibly write-off
d. No need to continue to spin your wheels
Legal Terms
Understanding legal terms can sometimes be confusing. Use the link below to help:
dictionary.law.com
APR's debt collection solution is a simple, diplomatic collection system that uses a benevolent approach to collecting your accounts receivables. If you want to retain a relationship with your customer, we offer a superior alternative to methods used by traditional Collection Agencies. Call us today to learn more about the APR debt recovery solution. We can make your bad debt collections easier and more successful. Outsourcing debt collection to APR is the best decision you'll make this year.
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