Tag Archives: business debt collection

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 Debt Collection Campaign Tips: What time of day is best to call?

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Your customer has not paid after the final past due notice. It is now time to tackle a debt collection call to figure out when you will be receiving your money. While we often discuss best practice phone etiquette and provide sample call scripts, many clients have inquired about the best time of day to call their clients to get the best results.

While there is no specific time or magic solution for calling and reaching a happy client on the other end of the line, there are several best practices you should follow when calling.

Get to know the person you are calling

Not only do you need to know the specific person to call, but you should try to form a relationship with that person.  If and when the client encounters financial troubles, you will have a deeper insight into their schedule. Keep notes on what business hours the person works, if they only work on certain days and any upcoming vacation time they will be taking. This could all provide helpful insight if you are calling their direct line and continually reaching their voicemail.

Call time can be influenced by business size

If your customer is a very small business, there is a potential that you could be in contact with the business owner instead of an accounts payable employee. If this is the case, try to call concerning collections early in the morning, around 7 a.m. Most business owners get to the office early to take care of business matters before being pulled into meetings. Remember, 7 a.m. is not a firm call time. It is always important to develop a relationship with the person you will be calling and use your judgment on whether a call before work hours is necessary.

First thing in the morning is better than end of the day

Collection calling is probably not the first thing on your to-do list that you want to do. Nevertheless, it is important to call early in the morning to reach people before they become busy with anticipated tasks and meetings. By calling in the morning you are more likely to get a same-day decision on a payment schedule, even if the client needs to contact you back later in the day.

What time of day is most successful for your business’s internal debt collection calls? 

Five Tips for Making Collection Calls that Get You Paid

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Debt collection calling is not the type of task most employees get excited about. Typically, in-house campaigns take employees out of their comfort zone. For most small businesses it is a task given to employees in addition to their normal job responsibilities. Don’t waste your time and money with an inefficient debt collection calling campaign. Instead, be successful from the start!

Here are the top five things to do when making collection calls:

Always prepare for excuses.

Unfortunately, most debtors will not be quick to offer payment options. Don’t allow yourself to get flustered by excuses. Instead, be prepared. Here are the most common excuses you will hear:

The check is in the mail.
How to respond: Ask for the date of the check, amount, address where it was sent and check number.

I never received the invoice.
How to respond: Always give the customer the benefit of the doubt. This is a great time to verify their preferred method for their invoice: email or mail. Always follow-up this discussion with asking how the customer will pay the past-due balance.

Our business is going through financial problems.
How to respond: Work to set up a payment schedule with the customer.

We completed the wire transfer yesterday.
How to respond: Ask for the routing and banking information. The customer could be telling the truth, but you need all of the information you can collect to verify the validity and make the most of the call. 

 

Do your research before the call.

Learn as much about the customer as possible before picking up the phone. Common information to find out includes:

    1. Has the customer had payment problems in the past or is this uncharacteristic?
    2. Did the sales person have concerns about the account?
    3. Terms of sale
    4. Payment due date
    5. Exact amount due

 

Always be professional.

Never threaten a customer for payment. The goal of the collection call is not merely to successful collect payment; you should try to also maintain the business relationship if possible. When on the collection call, follow these tips:

    1. Never multi-task. Be completely focused on the call.
    2. Speak slowly and take more pauses when you speak.
    3. Never eat food, drink a drink or chew gum while on the phone.
    4. Go into the call with a positive attitude. Your tone and inflection of voice will mirror your attitude.


Ask open-ended questions.

You will never get paid if you only ask questions with Yes and No answers. Let’s look at a scenario:

Option A: Do you plan on paying us soon?

Option B: What date can I expect payment from you?

Option B is obviously the better choice. You are committing the customer to a specific date. Make it a goal to commit the customer to something before getting off the call: full payment, partial payment, or even a date that they can let you know their payment plan (Remember, sometimes your main point of contact does not control the money within the business.)

 

Be deadline-driven, but still flexible.

Debt collection requires you to walk a fine line. You need to be assertive, but not too pushy. Always emphasize the urgency of the matter and try to have the customer commit to dates for payment.