Jun
15
2011

How to Cook Up a Successful Collections Campaign

My grandmother was the great chef in my family. When she cooked, you always went back for more. Several times, she tried teaching me how to make one of her specialty dishes, Chicken Adobo. Mind you, I’m a ‘straight from the recipe book’ cook and my grandmother measured everything by taste.  Needless to say, I’ve never been able to get my Adobo to turn out right.

 Cooking up a collections campaign may possibly be much easier than cooking Adobo.  Like any good meal, there are several factors that contribute to a successful collections campaign.  Here are some cookie cutter tips to think about…

 1)      Consider your target audience – include debtors who are up to 60 days past due. There’s a 90% chance of receiving payment if you request it within the first 60 days.

2)      Make sure the language of the letter is appropriate for your audience – tailor your letters depending on the severity of the delinquency. Use a “friendly reminder letter” for those delinquent between 1-10 days past due and a more severely worded letter 30-60 days past due.

3)      Educate your debtors – some businesses do not know the severity of being delinquent. Not only would the debtor be turned over to a collections agency but they would also get reported to a credit bureau, affecting their chances of obtaining credit in the future.

4)      Include the contact information for scheduling a payment – make sure that you have a phone number that your debtor can call to make arrangements for payments.

Look for future posts from me, and let me know if there are any specific topics about managing your portfolio that you’d like to see.