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Fifty Ways
to Become a More Effective Collector Beginning Today
© Credit Services Corporation
Eliminate grace periods.
Establish goals and expectations for every collection call.
Speak to the right person at the debtor company.
Leave fewer voice mail messages.
Take the time to confirm payment commitments.
Ask for a better commitment.
Address the current problem, as well as chronic problems with your customers.
Do not allow a collection call to be sidetracked.
Establish a systematic way to follow up to ensure that payment commitments are kept.
Personalize dunning notices, and avoid ‘cute’ reminders. Do not use dunning notices as a substitute for personal contact.
Harmonize your efforts and goals with those of your employer.
When an account is on credit hold, make certain there is no way that orders can bypass credit hold “accidentally” and get released.
Establish collection targets for every collector.
Target problem accounts for special attention.
Expect to be paid in full.
Use credit holds as a business tool whenever necessary.
Document deductions by reason code to track trends and address internal problems more quickly, and establish a dollar threshold below which deductions are written off.
Require customers to provide supporting documentation for deductions taken in a timely manner, and if they refuse to do so, make sure there are consequences for their failure to do so.
Recognize that customers allocate cash to and among its creditors.
Keep your commitments as well as your threats.
Think of a customer’s failure to make a payment commitment as an invitation to continue to talk and negotiate.
Always assume a customer’s first payment offer is their worst offer and act or react according. Keep talking until you either get the commitment you expect, or you are convinced the customer cannot do better than what they have proposed.
Establish personal collection goals, for example: A collector’s goal might be to make 20 collection calls before lunch.
Use cash discounts to accelerate cash inflows when appropriate.
Reduce the customer’s credit limit or shorten the payment terms.
Do not accept any payment plan you would have trouble explaining to senior management, and never make snap decisions about a customer’s extended payment proposal.
Systematically remind customers who do not remit to your lockbox to do so, and follow up until they do.
Ask delinquent customers to pay by overnight delivery, even if you have to pay the cost.
Assign more experienced personnel to larger or more difficult accounts.
Encourage collectors to promptly report (rather than cover up) collection problems.
Manage credit risk before orders are released.
Charge back unearned cash discounts.
Consider partial debt forgiveness as a collection tool.
Make more collection calls but continue to place a premium on the quality of the calls rather than the quantity of the calls.
Keep the initiative by making calls rather than leaving messages and waiting for the customer to call you.
Work with order entry and/or sales to be sure they are reviewing purchase orders for unacceptable terms and conditions of sale.
Be sure your credit application contains a personal guarantee that you can use as leverage if collections become a problem.
Make sure that your company’s invoices, statements, and dunning notices list your terms of sale.
Always use the telephone as the primary collection tool.
Make sure conversations are interactive...allow the customer to speak without interruption.
Deliver any required documentation to customers by fax--even if it is voluminous. Don’t ask if a past due balance has been scheduled for payment--ask if a payment has been mailed.
Prioritize collections calls, and ask to become a priority vendor.
Don’t allow yourself to be easily put off by a customer.
Become progressively more assertive the further past due an account becomes.
Negotiate only with decision makers.
Monitor customer’s payment patterns, when payments begin to stretch out--call to complain.
If you cannot contact the customer, ask the salesperson to arrange for someone to call you.
Recognize that while it is unreasonable to expect a customer to pay a disputed balance, it is also unreasonable for them not to pay the undisputed portion of the past due balance.
Recognize that customers have a vested interest in remaining off credit hold. Open account sales are mutually beneficial to buyer and seller.
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