Collection Phone Calls

Hi:
Many small business owners avoid calling their past due accounts for a variety of reasons. The most common one is that they do not want to create ill will with their customers. The second reason is that they do not have the time to set aside to make the initial calls, and then to follow up on those calls. What a business owner says during his or her initial call to a customer can determine whether or not a customer will bring his account current. There is a standard set of three collection calls a business owner may consider using:
1) The first call is pleasant and firm, providing the customer with the exact amount that is past due. Whenever possible, a payment date should be set during the phone call.
2) The second call is short and to the point. The customer needs to know that the business owner will take whatever action necessary to collect the account. Once again, determining a specific payment date is very important.
3) If no payment is received by the specific date, it is important to give the customer one last phone call notifying him or her that the account will be turned over to a third party (collection agency/attorney) for collection.
If a business owner decides to accept a repayment schedule from a client, notify the client that it will be put in writing and mailed to him or her. It is important never to tell a client a collection technique will be implemented, if there is no intention of following through with it. If a business owner has past due accounts, but not the time or inclination to pursue them, hiring a part time employee to make collection calls might be an option.
Tomorrow I'm going to write about how to select a good collection agency or attorney.
Until then,
Alan

Collection Letters

Hi:
Many small business owners are hesitant to send collection letters and/or call clients that have past due accounts. The primary reason is that they are afraid of alienating their customers. Familiarity with collection techniques can give small business owners the confidence to contact past due customers. Here are some suggestions for effective collection letters:
1) The initial letter sent to a customer should be informative but firm. When the customer reads the letter, he or she should realize that immediate payment is required, or payment arrangements made with the creditor. Stamping a bill past due, in itself, is not a successful means of collection.
2) The second collection letter sent to a customer should give a specific date by which payment needs to be received, or the business owner will take whatever actions deemed necessary to collect the account.
3) The final letter to the customer should inform the customer that their account has been turned over to a collection agency/attorney for collection.

Due to time restraints, many business owners don't contact their customers quickly enough when their accounts become past due. A customer who is experiencing hard times, will oil the squeaky wheel. When people hear that their account is past due, it's harder for them to ignore the call, than it is for them to set aside written communication. If a business doesn't have the time or inclination to make collection calls, it is wise to investigate hiring a part-time person to make the calls on behalf of the business. Tomorrow I'm going to write about different types of collection calls and what type of payment arrangements are the most successful.
Until then,
Alan