The most successful businesses are those that implement effective debt collection strategies. This helps them to ensure that accounts are being paid and outstanding debts are being brought in, which in turn increases the cash flow coming into the business.
Effective debt collection in a recession
Outside debt collection agencies are experienced professionals and they implement proven strategies that reap effective results from delinquent debtors. Here are some of the tactics they use:
Reminder letters to delinquent customers that use polite language are often very successful as a debt collection strategy. Many times its a simple case of having either having forgotten the past due bill, or that it has been misplaced. In either case, a simple polite reminder statement can jar their memories…most will pay promptly.
If you are struggling to compose an effective debt collection letter these templates will prove helpful.
Reminder Telephone Calls
Calling a delinquent account holder to remind them of their past due bill can be effective as well. Should you make these calls yourself, be aware that some customers care little about your business, or your cash flow.
Since they already know they’re delinquent, some customers could become defensive when they get your call. You can certainly do this yourself, just be prepared. These debt collection via telephone tips will help you to get the tone right and make your calls more effective.
However, you should always stay focused on the task at hand: settling the delinquency, ascertaining why the bill remains unpaid, and possibly working out payment arrangements.Psychologically there are many customers who believe they have received the goods or services they wanted and the bill can wait until their own personal finances are in better order.
Using a debt collection agency
This mind-set can be completely reversed by engaging debt collection agencies to make the call for you. People become alarmed at being contacted by a third party and will instantly believe their overdue account is far more serious than they first thought.
Collection Agency Demand Letter
There are some customers who will continue to ignore your repeated reminders and invoices. In these instances, it may be time to employ outside debt collection agencies who can issue firmer, more stern demand letters.
Again, the third party impact can be a powerful incentive for customers to respond.As many customers are concerned and care about damaging their good credit, these debtors will think differently after being contacted by a third party agency. This is often enough to prompt them into action.
Employing Skip Tracing to Collect Outstanding Debts
Because we live in a very mobile society, some of your delinquent customers may have changed jobs, moved to another city, or changed other contact information. These customers become very difficult for your business to try to locate.Third party collection agencies have access to better tools and resources: software, databases and many other tools in their arsenal that enable them to locate your delinquent customers when you can’t find them.
If you find you’ve exhausted all the tactics in your current debt collections strategies, don’t feel as though you need to write that debt off just yet. There’s still hope of receiving the cash your business needs. You still have the option of using third party collection agencies that are able to pursue the case legally.