Category Archives: In-House Debt Collection Strategies

Tips and strategies for streamlining your in-house debt collection processes

Accurate Invoices and Statements Get You Paid

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Business woman at computer, C2C ResourcesIncrease your profits by reducing errors

At C2C Resources we offer a powerful web-based accounts receivable management system we call Profit Maximizer.
With over 70 years of experience in commercial debt collections, we’ve learned how to streamline processes to increase profits.

Profit Maximizer benefits our customers by housing all their A/R details in one place that can be accessed at any time from any place.

Profit Maximizer provides multiple import options including:

• Direct link with QuickBooks including automatic sending & updating
• Reports that offer multiple viewing options
• Collection letter templates ready to send via email, fax or mail
• Follow-up phone call scheduling to ensure prompt communications
• Notes for storing details of each communication
• Collection timeline for effective and timely communication

There is no extra cost to our customers for using Profit Maximizer. We offer this web-based accounts receivable management system in an effort to increase profitability in-house.

4 Most Common Responses to Your Debt Collection Campaigns

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Running an internal debt collection campaign is essential for getting the money back that your company is rightly owed. While it is important to design your debt collection campaign to effectively reach out to clients quickly after an invoice goes unpaid, knowing what to do after your call, email or letter will help drive success.

Here are the top four most common responses businesses receive from their debt collection efforts:


Prompt payment
This is the ideal scenario. Sometimes a missed invoice is a mistake within the accounting department or the result of an employee being on vacation. If the client promptly pays after you reach out to them on a past-due invoice, always verify the following:

  • The best point of contact’s name, email address and phone number
  • Their preferred mode of contact for invoices (email v. mail)


Acknowledgement, with actionable response
This is the next preferred scenario after you contact a client concerning delinquency. When a client acknowledges that they are late on their payment and confirms a date they can pay their invoice, as a company you should follow-up to confirm:

  • Method of payment
  • If they have all of the essential information to pay (routing number, company address, etc.)
  • Reason for late payment. Gathering as much information as possible for your records is important should the delinquency happen again.


Acknowledgement, but no actionable response
In this scenario, the client is aware that are late on their invoice, but does not confirm or offer a date for payment. Always reach out to the client because he or she could have forgotten to include that information in their communication with you; or they could be waiting on someone within their business to confirm a date of payment. Whatever the case may be, it is your goal to get a date set with the client. The probability of receiving payment drastically increases when you can commit the client to a specific date or payment plan.

No response
If you receive no response from a phone call, email or mailing, there may be several reasons for this.

  • You may not be contacting the correct person.
  • The client has a cash flow problem and has yet to find a solution. They are simply trying to avoid communication with you.
  • The client is unwilling to pay the invoice and is trying to avoid you.

With any delinquent invoice, you should always follow the bad business debt timeline, which features a series of phone calls, letters and emails to engage with the client. You can find the full timeline here: http://c2cresourcesblog.com/c2c-resources-commercial-debt-collection-agency/bad-business-debt-timeline/.

Internal Credit Application Investigation

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business

Whether you have taken advantage of our free credit applications or not, your business needs to utilize an internal checklist during the investigation process to verify that the information provided is correct. A verification checklist not only keeps your staff honest in verifying the entire application for every client, but ensures that your business is not endangering itself with bad business debt. This is particularly important for clients who you have never worked with.

If you have not used a credit application checklist in the past we suggest making it your year-end goal to review all existing credit applications for credit that is currently extended.

Verify the following business information provided within the credit application and review any discrepancies with your client:

  • Legal entity status
    • Most states’ Secretary of State Websites will allow you to verify the corporate status. Make sure to keep this on file either digitally or as a hard copy. Included on this site will be the principal office location, the business’s original date of formation and their main point of contact.
    • Phone
      • Do not just verify that the phone number is listed online. Dial the telephone number and see if they answer with the name given.
      • Business Name
      • Address
      • Contact Name/Title

Verify the following bank information:

  • Name of bank
  • Address
  • Phone
  • Contact Name
  • Account Number
  • Age of Account

As a best practice, always contact the trade references listed on a credit application. Remember, most business owners only provide contact information of companies who they know will give good references. Nevertheless, contacting the references provided will give you a further understanding of a client’s payment history, relationship with other vendors and balance ranges that they have had in the past. If you do have concerns over a client, you can always investigate and see if they include suppliers on their website who you can reach out to. They may provide you a more accurate snapshot of the client’s history.

The credit application and investigation process are valuable tools for your business. Always keep a copy of both the application and your investigation notes for future reference.

Here is a copy of our internal checklist. Fill it out online or print it out and scan the documentation into your client’s file.

http://c2cresourcesblog.com/wp-content/uploads/2012/09/Internal-Worksheet-Checklist.pdf

What Makes a Good Debt Collector?

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Businesswoman making a call - C2C ResourcesAs a business owner, your collection call team will lead you to increasing cash flow. But is a good debt collector born with “it” or taught “it”? For small businesses and start-ups, finding the right person on the team is particularly important because often team members wear multiple hats; only needing to step into the role when needed.

We think the right person has a combination of the right personality traits and proper training. Don’t always go for the sales person or accounts receivable person on the team. While they may be directly related to the process, they may not have the personality needed to deal with potentially intense situations.

 

When considering a team member, look for the following traits:

-          Problem-solver: Often driven to find a solution, the problem solver is going to approach the situation with unique ideas. They will be results driven, even if the debtor becomes upset during the process.

-          Self-motivator: Getting on a call is nerve-wracking because the debt collector does not always know how the debtor will react. By having someone with a keen sense of self-motivation, they will be driven to get the work done.

-          Tenacity: If a debtor is persistent with providing reasons as to why they cannot pay, the collector will need to be just as persistent to make sure that the call ends with an action item of next steps in the payment process.

 

And, provide the following training:

-          Selling: The debt collector on your team needs to be able to prove to the debtor that they must pay. This is very similar to a salesperson’s role. By providing the team member with proven tactics you can prepare them for the most challenging calls.

-          Customer Service: While it may be a good idea to pick the most tenacious person on the team, they also need to have good customer service skills. Being too controlling during the situation could turn the customer off and lead to no payment. The ideal candidate would have a good balance.

Finding the right person on your team to handle debt collection calls goes beyond the ability to pleasantly interact with customers. It requires a combination of skills to be effective.

Do you have the right person for the job on your team?

The Effects of the 2014 Winter Weather

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Everyone is feeling the effects of this harsh winter weather

Snow plow, Commercial Debt Collection Agency.comMany small businesses are feeling a little beat up by this winter’s harsh weather. Even those not in the direct path of the storms will feel the trickle down … regardless of where they’re located.

In areas like the Atlanta where the proper snow equipment isn’t available, businesses shut their doors resulting in big losses in the most recent bout.

Atlanta’s not the only one. Across the nation, snow and ice has wreaked havoc over and over keeping people at home instead of working or spending money. And the North East just got smacked again!

What is the toll? The New York Times reports that this winter’s snow-packed punch is an expensive one for most of us saying,

Economists have placed much of the blame for a recent spate of weak economic data on the effects of the unseasonable cold in the Northeast, Midwest and South, which they project will shave a few tenths of a percent off the growth of gross domestic product in the first quarter.

How have you managed the 2014 winter weather? Are you feeling Mother Nature’s wrath?

Easy In-House Debt Collection

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Are your in-house debt collection procedures streamlined?

Do you have a process to follow that helps keep your past due accounts to a minimum? If your in-house debt collection policies could you some fine-tuning, C2C Resources can help.

It’s not uncommon for the task of debt collections to be neglected in a business. For one thing, it’s not pleasant to make a collection call so calls often get put on the back burner. However, if you have the right tools at your disposal for making calls and sending notices, the task of managing your Accounts Receivables can be less painful and considerably more effective.

Debt Collection, C2C ResourcesC2C Resources can help you manage collections in-house with its powerful Accounts Receivables management software system. Profit Maximizer is designed to help businesses keep track of the details throughout the debt collection process. It provides Contact Management, a detailed Reporting System, call scripts and collection notices that you can easily adapt for your needs. Simply fill in the blanks on the template and hit ‘send’.

You can also sync with Quickbooks and input Excel spreadsheets with the click of a button.

As a partner, we provide our clients with everything they will need to manage accounts receivables in-house through our Profit Maximizer program. And there’s no extra cost to use this web-based program! When you partner with us, Profit Maximizer is yours and we offer support as you learn the system.

Experience the difference with Profit Maximizer! Check it out at C2C Resources.

 

Be the Creditor that Stands Out So You Can Get Paid

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As a creditor, you must stand out from all the other ones in order to be the one who gets paid!

Businessman, Creditor, C2C ResourcesWhen you call your past due customer, it’s quite likely that yours is not the only collection call he’s taken that day. In fact, he may be staring at a stack of bills an inch thick while on the phone with another creditor right now!

Why should he choose to pay YOU over all the other creditors he’s dealing with?

Because you have an edge! You know how to keep your cool as you dig beyond your customer’s claim of a cash flow problem. You’re a creditor, so you know the importance of listening to your customer’s story and the importance of verifying his claims. AND you know how helpful his Merchant Statements can be in spotting downward trends in sales.

Fact is, most of his other creditors aren’t listening patiently or validating any claims. And they certainly aren’t offering truly helpful suggestions for solving the debt. They’re loosing their cool instead. And every creditor that looses it get’s his invoice shoved to the bottom of the pile.

You have a greater chance of being the one creditor who gets paid by remaining professional in every engagement with your customer. He’ll take you more seriously when he sees you’ve done your homework. And when he realizes that you know he can pay his debt to you, he’s more likely to do so, especially when you’re flexible about how and when the bill will be paid.

The bottom line is, your customer can’t pay every past due invoice he owes to every single creditor, but he probably can pay yours. Make him pick you over the all those other creditors by patiently listening to his story, validating his claims and returning to him armed with information. You may be the one creditor who is willing to work out a plan without yelling and screaming. If so, he’s likely to pay you first.

 

In Commercial Debt Collection, Should You Take a Settlement?

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When collecting a commercial debt, the decision whether or not to take a settlement comes down to one thing …

Hand shake, Commercial Debt, C2C Resources

In Commercial Debt Collection, sometimes a settlement is the right choice.

If it’s likely that your customer will be unable to honor an extended payment plan. To know for sure, you must find out the facts of your customer’s financial situation.

Start with a lengthy and detailed conversation with your customer. Listen intently to his explanation and take detailed notes.

While you’re on the phone, request that he send you his last 6 months worth of Merchant Statements. Once you have all the information you can get from him, take the following steps:

• Review his Merchant Statements to spot downward trends in credit card sales. Are they up or down?
• Verify the claims he’s made by contacting his other creditors. Did he tell them what he told you?
• Talk to your customer’s bank. Would a check clear if he were to issue one?

The information you gather may lead you to conclude that your customer really has no money (or too limited an amount) to pay you. If it looks to you like things are likely to continue to deteriorate, then taking a lesser amount now is better than being paid nothing later. It’s but one of the challenges of commercial debt collection.

It takes patience to do the investigative work to make the settlement decision in the process of commercial debt collection. But it’s the only way to make an informed choice.

The Beauty of a Merchant Statement

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Merchant Statements can help you in your business

Does your new customer do a meaningful amount of credit cards sales through her business? If so, you need her Merchant Statements in your client file right from the start. Here’s why:

Business people, C2C Resources, Merchant StatementsTaking on a new customer is a new credit risk you’ve chosen to take. From the first day you meet her, you discuss your credit policies, make your terms clear, put agreements in writing, shake hands and hope it will be a profitable, long-term business relationship with nothing but smooth sailing ahead. Then one day down the road, she requests an increase in credit.

Such a request could be a good thing or it could be a bad thing. Maybe their sales for your product increased. That’d be great! It could be that they’re shifting their business away from a competitor. That’s a perfectly valid reason to request an increase. However, it could be that sales are way down or that a competitor has terminated her credit privileges. Not so good. But how would you know unless she volunteers the information?

This is where the Merchant Statements come in. If you request 2-3 months worth of merchant statements right at the start of your business relationship (when your customer is most open to providing them), you’ll have a powerful benchmark sitting right there in your customer file ready for just such an occasion. When she requests an increase in credit, you request another set of Merchant Statements to compare to your first set. Are credit card sales up or down? If sales have declined, is it minimal or significant? What?

Request Merchant Statements right from the start of your relationship. Keep them in the file for future reference and use them to make informed decisions.