Debt Collection 1 “It is all about being methodical!”

By February 6, 2012 February 5th, 2016 Articles

Why is it that chasing outstanding debt always gets put to the bottom of the pile?  The reason is usually either one or a combination of the following:

  • Fear of confrontation
  • Fear of losing a good client
  • Fear of losing a loyal client

If you follow a simple method, it is not necessary to run the risk of any of the above and, get paid, much sooner rather than later!

methodicalThe basic rule is; never do the same thing, month-in and month-out!  Never forget that your prospects of recovering a debt halve with the passing of every one hundred and eighty days.  It is all about a mind-set the debtor slips into with the passing of time.  Most people start out wanting to pay their debt but if they get a monthly call in tones of “….friendly reminder”, they will soon have other priorities and urges as to where their money should go. The antidote to this is a patient, dignified but pro-active method.

STEP ONE

The day after the debt falls due, a phone call (not an email or faxed note!) should be made by one of the junior staff members; simply pointing out that the payment is now due and noting any comments.  He or she should just listen, take notes and terminate the call by advising that the matter would be referred to the person responsible, who’ll get back to them.

STEP TWO

The second phone call, made one month later, advising the debtor, that since the previous phone call, the promised payment of Rx.xx has not been received.  This call should be made by a more senior staff member (eg credit controller).  Definitely not by the person who made the first call.  This will bring home to the debtor that they will not simply be receiving a routine monthly reminder telephone call. Rather, the matter is progressing towards hand-over, if not paid immediately.  This should be confirmed with an email.

STEP THREE

A telephone call, again from a more senior member towards (preferable the CEO personal assistant), advising, that unless payment is made immediately, the account will be handed over for collection.

The above method is easier to follow than you think and will soon become a routine in the running of your business.

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Some useful tips and “points to ponder” in getting it up and going, are the following:

 – Choose the right personality type to make the call.  Someone dignified, approachable but businesslike.

 – Never make threats, or plead for your money (you’ve earned it!).  Remember, you’re not the “bad guy”.

 – Never advise them that your bank manager is “on your back”, you have urgent medical bills to meet, from your kids, orthodontist, etc etc.  This will simply evoke a long list of similar experiences from the debtor!  Besides, it’s none of their business.

 – Never argue or get angry!

Finally, remember that DebtLegal will conduct step three for you as a “pre-legal” arrangement.
Contact us now to find out more.

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