Today’s gradually improving U.S. economy still presents special challenges to controllers and their collections staff. Having clear and concise processes helps collectors do their jobs and can save valuable customer relationships. The following are some best practices which can be easily implemented in your collection efforts.

No Substitute for Phone:

Despite all the high tech solutions being implemented in credit and AR today, when it comes to collections the good old phone should remain the tool of choice for collection efforts. The reason is simple—it’s still the most effective way to get recalcitrant customers to part with the money. It is hard for customers to avoid you when you have them on the phone.

That doesn’t mean, of course, that a phone call will solve all your past due collection issues. Successful collection calls are a learned skill. To maximize results, train and retrain your collectors in the following proven approaches.

8 Collection Call Tips:

  1. Prepare before you make the call. Make sure to have all the information needed in front of you. If the customer made a promise that has not been kept, line up your facts. Have ready access to the customer’s payment history. Finally, if they’ve made some notes about the person you about to call, review them before picking up the phone. Establishing a personal rapport with the person on the other end of the phone won’t guarantee success but will get the collector out of the gate a lot faster.
  2. Make sure you the right person on the phone. All too often, collectors wind up talking to the customer’s AP manager, who has not yet received the invoice approved for payment. Find out who authorizes payment in the customer’s organization and call that party. Otherwise you will be wasting time and potentially aggravating the AP manager whose job it is to move your payment through the process once the approved invoice turns up.
  3. Never let lose your temper, even with the promise breakers. When you call a delinquent customer who does not mean to pay, regardless of whether it’s a “can’t pay” or “won’t pay” account, don’t let the customer draw you into a confrontation. Instead end the conversation quickly by saying you will call back after the customer has cooled down—then them call back as promised.
  4. Always ask for the money in full and don’t waiver or beat around the bush. Unless you come right out and ask for the funds, the customer is not going to offer to pay. Don’t be vague.
  5. Let the customer talk and don’t feel the need to fill every moment with conversation. After you ask for the money, wait quietly. If the customer doesn’t respond, don’t rush in to fill the void with conversation. Let the customer feel uncomfortable and respond. The best advice is to let the customer make the first offer.
  6. If the customer really does have a problem, look for a compromise solution. This might mean taking partial payments or letting you take a security interest in the assets of the customer’s company. Once an agreement is made, repeat it to the customer to ensure you are on the same page. Too often, when the conversation ends, each party thinks a different solution was reached. Then follow-up with an email to document the agreement.  If you are taking a security interest, you will need a more formal document preferably drafted and reviewed by counsel.
  7. At the end of the conversation, tell the customer your company appreciates its business. This ends the conversation on a pleasant note. After all, you want the customer to honor its agreement and make the payment agreed to.
  8. Document the call in the customer’s file. Make sure to note any promises made and schedule a follow-up phone call if the agreement is not kept. That way, once customers realize they’ll be called on for assurances not kept, they will either honor their pronouncements or not make promises they cannot fulfill.