A Few Tips to Improve Collections

One of the best things you can do to increase the amount of bad debt you collect in-house is train those responsible for collecting it. This may sound obvious, but in many cases few companies devote the time and effort it takes to really improve their collection efforts. Of course, it may just be easier to outsource, but even very little training can yield substantial long terms results. Here are some of the things our collectors have found to be most helpful.

Do not accept everything your customer says

Anyone can call a customer, hear an excuse for why payment is late, and then call it a day. Customers will always have reasons for why they have not paid, a good collector will understand be able to understand what excuses are real and what ones are not. A good way to go about figuring this out is to simply ask for more details. Real reasons tend to hold up to the test of scrutiny while made up ones tend to fall apart once they are prodded.

Do not forget you are also in the business of customer service

This is one of the most important pieces of advice to tell new collectors. Under no circumstance should you bully or intimidate your customers into paying. You should remain firm, but you should always try to try to work with the customer, not against them. People tend to respond much better when they think you are on their team.

Business people, C2C Resources, Merchant StatementsKnow how much is too much

Calling a customer is great, but calling them 10 times in a day is not. While this may be a silly example, collection efforts abide by the law of diminishing returns. This means that, at a certain point, more emails, calls, or letters will help less and less. It is important to be persistent, but never overbearing or excessive.

Understand the big picture

It is important to always consider the reward to effort ratio. Meaning, the more effort required to collect an account the larger the reward should be. At the end of the day, a collector’s job is to recoup the most they can for the company. If you spend 90% of their time on a small account, you are leaving money on the table. Of course, you should not let customers slide just because their account is small, but at the end of the day, it is important to understand the bigger picture.

Though in some cases you will have to outsource the collection process, in many cases some simple training on how to collect the debt will allow you to keep more of that money in-house.

This entry was posted in Uncategorized. Bookmark the permalink.