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It's important for collectors to remember that customer service is a key part of their position when making calls to past due customers. This not only makes it easier for the customer to open up about what the delay in payment is, but also keeps a positive attitude during the call and prevents a hindrance on future business with the customer. The start of the call is going to influence the tone for the remainder of the call. Often times, collectors will start out a conversation by informing the customer their account has a past due balance. Although this may be true, it often puts the customer on defense. It's best to approach the customer with a customer service position. Informing the customer that an invoice was mailed out, the date it was mailed and inform them you are calling to ensure they received it. Offering to fax or email a duplicate copy of the invoice will put the customer at ease. This takes the blame off the customer and lets them know that you are not making the assumption they have done this on purpose.
If the customer accepts the offer to have the invoice faxed or emailed to them, ensure you follow up with them in the next two days to ensure they received it and to check the projected payment date. Asking if the payment has already been mailed is also a defensive question. Asking for the projected payment date tells the customer you trust they are going to send it.
If the customer responds that they have received the invoice, its best to ask them if you can inquire on the status of payment (projected payment date). There are a number of reasons a customer provides for delayed payment. In order to keep the conversation positive, the collector should ask if there is anything they can do to assist in getting the payment released. There may be an issue such as needing a proof of delivery, lack of purchase order number on the invoice, etc. depending on your industry and product or service you provide.
Always be sure to follow up and follow through. When making a collection call, be prepared to research, send additional information, etc. right after the call. Providing a quick response to the customer's request lets them know you are serious. If there is a gap between your conversations with the customer, they could continue to use this as a stall tactic knowing that it will increase their time to pay. When there are issues taking more time to research, keep the customer posted on the progress with a quick email or phone call. E-mail works best for updates. This way you are not interrupting the customer's day, but you are still keeping the matter fresh in their mind.
If the customer gives a promise to pay, be sure to follow up on the next day after the promised date. Inform the customer you are just calling to obtain the payment information to keep the records updated. This will remind them they have the arrangement and also let them know you are focused on their account. If you wait beyond that, and the customer has not yet sent the payment or has forgotten, this will cause for even further delayed payment.
It's the collector's responsibility to ensure they are well organized. Staying firm and consistent will in turn bring better DSO's and maintain a positive business relationship between the customer and the company. Any time a customer can see that a collector is not on top of it, or unorganized, they will use this to their advantage to age the invoice out even further.
If you are unsure of the collection practices you are currently using, its never a bad idea to get a second opinion from a Consulting company who specializes in the area of Credit and Collections. Every industry is different and requires different tactics to ensure positive DSO's. Especially if you're not happy with your current DSO, feel it could be better, or feel your place too many accounts with third party agencies that's the time to make the call. There is always room for improvement in any process. Don't wait for the meltdown.
William J. Kesman
Credit Services Plus, Inc.
Management & Consulting Services
5005 Rockside Road, Suite 600
Independence, OH 44131
(216) 573-3770 Office
wkesman@creditservicesplus.com
www.creditservicesplus.com