Business Debt Collection Tips

Business Debt Collection Tips
General
• Anticipate, wherever possible, the customer’s needs.
• Become best friends with the accounts payable manager at
the corporate headquarters.
• Become a squeaky wheel with your largest delinquent customers.
Let them know that you have no intention of going
away until you have been paid. This will help with the current
collection and future ones, as well.
• Become the squeaky wheel who gets paid first.
• Begin follow-up efforts earlier.
• Build a strong relationship with your customer’s accounts
payable manager.
• Communicate immediately with a past-due customer via an
invoice copy and a computer-generated message. Follow
this up with a phone call.
• Educate your customers. Make sure they know what your
payment terms are and when you expect to be paid.
• Establish consistency in customer contacts. This means
that credit, customer service, and sales must tell the customer
the same thing when it comes to payment terms.
• Focus on largest accounts and get them to pay close to
terms without letting the smaller accounts get completely
out of hand.
• Follow-up, follow-up, follow-up. Use frequent and persistent
phone calls to follow up on late payments.
• Get to know the accounts payable manager at your customer’s
company personally. If the manager likes you, your
chances of getting paid on time will improve.
• Have a well-documented sales agreement defining payment
expectations.
• Have collectors keep detailed notes of all promises made
and follow up with customers the moment a promise is
broken.
• Have invoices printed and mailed quickly. Some companies
take a week or more to get invoices in the mail, and their
customers start the clock running when the invoice hits
their desks—not on the invoice date.
• Identify recurring problems with a particular customer and
get involved in resolving the problem—even if it is something
outside the credit and collection department.
• If your collectors run into the same problem with different
companies, review your own internal procedures to see if
you can fix the problem.
• Improve the collection staff’s negotiating skills to improve
the effectiveness and quality of customer collection calls.

• Make sure that your invoices are correct the first time they
are printed. With accurate data, your customer will not have
to waste valuable collection time trying to correct the invoice.
• Notify both the customer and the salesperson the minute
an account is put on credit hold.
• Personal contact in a nonoffensive manner works well.
Friendly reminders keep the communication channels open.
• Put some muscle behind your calls. If the customer doesn’t
do as it promised, follow up with the agreed-upon action.
This will let them know in the future that you will act if they
don’t perform.
• Keep regular, consistent contact with customers’ accounts
payable personnel.
• Remember to say thank you. Phone, fax, or mail a small
thank-you note to someone who has helped you resolve a
problem. Once or twice a year, send a thank-you gift (such
as a T-shirt or coffee mug) to everyone. This mass mailing
will be more appreciated by the recipients if it is not done
at year-end when other year-end gifts and festivities may
diminish its value.
• Resolve all disputed issues before the due date of the
invoice.
• Set deadlines and then communicate those deadlines both
to those involved internally and to the customer.
• Support the customers’ accounts payable staff in their
efforts to resolve problems and discrepancies.
• Train the customers from the inception of the relationship.
Explain due dates and collection policies to new customers
as soon as the first payment becomes one day past due.
• Treat all people with respect. The customers do not look
forward to the collections call, and letting them know theirbusiness is appreciated is a good way to start the conversation.
Once the funds have been received, the hard decisions
can be made.
• Use friendliness to disarm even the most cantankerous
accounts payable manager.
• Use imaging for document retrieval. This will save your collectors
an enormous amount of time by giving them the
information they need without them having to pore over file
cabinets to retrieve it and then refile it.
• Use technology, specifically faxes and e-mail to reach delinquent
customers.
• With new accounts, especially if significant amounts are
involved, make it clear that prompt payment is expected. If
the customer is slow, tactfully jump all over it.

These are some of the general tips to help you collect your business debts.  These are by no means conclusive, but will definitely help you in obtaining a higher percentage of collections.