Businesses are faced with the need to collect on delinquent accounts. When pursuing these past-due accounts, the most successful way to approach them is with a combination of perseverance, politeness, and professionalism. This serves the dual purpose of increasing the likelihood of receiving a prompt payment and also staying within the guidelines set forth by the Fair Debt Collections Practices Act.
While constantly calling a customer for payment can be a drag, perseverance will pay off—literally. Keep notes when calling the customer, detailing when you called, the time you called and if the customer promised payment. If payment was promised, make a note of when. Most software will have note-taking capabilities, so use that to keep track of whether the customer is following through with payments or not. Aim to call once a week to keep your company in the forefront of the customer’s payable person.
Being polite can be trying when the customer is being evasive about payment status. Remember the old adage of catching more flies with honey than vinegar. Being polite gives the customer less reason to avoid payment. Share a story or joke with them. Get familiar with the person doing the payments for your business. Avoid negative outbursts containing vulgar language or calling multiple times per day, which are both violations of FDCPA code.
Above all, remain professional. Do not allow emotion or personal feelings about the customer cloud your attitude. This is strictly business, and the customer who may be slow or evading payment would do the same to anyone else in your position. Talk to them about payment plans if they are having a hard time paying. If they are hesitant to pay, ask for the reason why. Is there an issue with the product or service your company offers? If there is a problem with the product, talk to product/servicesupport staff to see if they are aware of this issue. If they are, ask them to contact the client with the solution.
Sometimes it is necessary to involve sales representatives while collecting. The sales rep can go in and play “Good Cop,” letting the customer know that they would love to sell them more product or further service, but that there’s a problem with the account that needs to be resolved with the customer’s accounts payable department. This normally results in the procurement associate contacting the accounts payable department and asking why payment has not been made on the prior purchase. Thisfacilitate payment, and in turn, increase company cash flow.
Using these techniques will reflect respect and courtesy, which in turn elicits goodwill with the customer.
Business Chat | LIVE – Credit & Collections with Katie Keitch
We had a great interview about best practices in B2B Collection with Katie Keich. Katie is the V.P. of Commercial Services at InsideARM. She shares how to drive a successful collections strategy in your credit department or through 3rd party collections.