There are some parts of running a business that many of us just don’t like to do. Depending on the size and nature of your business or industry, you and your team will have your hands in many aspects of running the day to day operations. Aside from everything else on your plate, there will be items that come up that require your attention and that fall under the category of mission critical. One of those is collecting on overdue payments to your organization.
While our professional debt collectors do enjoy their jobs, we understand that for many of you, collection calls are not something you like to do. You’d rather be doing other things to grow and run your business. But part of being in business is chasing down payments sometimes and you’ll have to understand that this is just part of keeping your business cash flow positive. Contacting customers about late payments can mean the difference between positive and negative cash flow.
Here are a few suggestions on how to make collection calls work
Never assume that because you did not receive a payment from a customer, that the person is avoiding you. There is an endless list of reasons why customers do not pay their bills on time or pay them at all and some can be legitimate reasons. That being said, after repeated attempts to collect on an overdue invoice with no success, there begins to be evidence that the customer is avoiding their obligations to your business. Maybe they have had a setback in their life, or they had an issue with your service and have decided not to pay. But you should keep an open mind when you communicate.
Communicate with Tact:
In short, be nice when you get on the phone with a customer and treat it like a customer service call. Show that you truly care about their business and your relationship and do your best to keep a calming tone. It’s our nature to put up our guard when we are confronted in an aggressive way so the nicer and more natural you can be on the phone, the better your results will be in resolving the past due debt. If you get angry or try to lecture your customer about not paying, you’ll have a more difficult time collecting the money that is owed to your business and you’ll probably damage that relationship with the customer.
Follow the Law:
While most laws and regulations in regards to collecting money are meant for debt collectors and other creditors, it’s a very wise decision to make sure you are following all laws when you make your collection calls. Simply get online and look for your state’s website and search for the collection laws in your state. The most common place would be on the Attorney General’s website. Laws are different in each state so you should be following those and familiarize yourself with federal regulations. Doing so can mean the difference between lawsuit and staying out of court. And owing the consumer money in the end.
Stay on Schedule:
Your team should have the systems in place to stay on schedule with your collection calls. First, because we know that for many, collection follow ups can take a backseat sometimes to performing other important tasks in your organization. This keeps you on track and you have in your schedule that you’ll be following up with customers during that set time and interval. Keeping on schedule also helps you from breaking the law as we mentioned above. If you forgot when you called a customer about a late payment and then you called again, you could end up violating set regulations without know it. Keep records and staying on schedule is important.
There are a few ways to get help with your business collections. The best way however is to work with a reputable collection agency. Choose one that meets your needs, understands your business and your challenges and can give you a plan that gets results. The agency you choose to work with should have a set of values they follow, understand diplomacy and give you the tools to make life easier for your business. They should represent your business with tact and they should show you that they have professionally trained debt collectors that know the laws and know how to resolve situations with your customers. If you don’t have time to collect, this is the best way to solve your cash flow issues.
For many businesses, there is a system in place where the past due debt with a customer is worked internally for a period of time and then once it gets to a certain point, such as the 60-day mark, it is then turned over to a professional debt collection agency.
Before you do that, making an attempt with your own resources in a professional manner is highly recommended. Be nice, follow the laws and get help when needed.