Tavelli Co., Inc. - Jul 15, 2021
Successful Debt Collection Practices
Almost every business has delinquent customers. Late-paying customers are not good for your business and can drastically interrupt your cash flow. If a customer has an outstanding payment, there can be three possibilities: they forgot, they are deliberately delaying payments, or they are faced with a situation that has caused them to fall behind on payments.
Whatever the reason, you need to move fast to collect the money you’re owed. If your team is already overloaded, consider using a California debt collection agency. Experienced debt collectors know the ins and outs of the debt collection process and will protect your business’s brand while collecting on your behalf.
Follow these tips to increase your recovery rates.
Do Your Homework
Before you make the collection call to an overdue customer, make the effort to know everything you can about them. Make copies of contracts with the customer and invoices. Collect and compile information that you will need when communicating with the customer. An added benefit is that the more thorough your records, the easier time you will have collecting. Always strive to have complete, accurately documented records and contracts.
Don’t Assume Anything
It’s easy to assume that a late-paying customer is deliberately delaying payments. When making the initial debt collection call, do not let false assumptions cloud thinking. Approach the situation with an open mind. Empathizing with a debtor will yield better results than being hostile. Listen to what they have to say and be sure to document the interaction accurately and thoroughly. Respectfully guide the conversation to keep things on track and get the best results.
Give Options
If a customer is going through a rough patch, see if it is possible for them to make reasonable payments over time. Try to work out a plan with the customer that will work for both you and them.
If the customer cannot pay the entire outstanding amount in one go, offer them an installment plan. Depending on your original contract with the customer, you might be able to accrue interest. Re-evaluate the current risk when considering any future business relationship.
Don’t Lose Your Cool
Sometimes, when you reach out to a late-paying customer, emotions can run high. Your customer may try to intimidate you and act aggressively without provocation. Whatever happens, do not let your emotions get the better of you. Stay calm and in control. Any other behavior may come back to make your life more difficult.
Remind the customer that you genuinely want to help them. Listen to what they have to say and try to keep the dialogue as constructive as possible. Know when to hand it off to the professionals.
Tavelli Co., Inc. is a leading California debt collection agency. We have over 35 years of experience in debt collection and have amassed a variety of strategies and approaches to collect your money the right way. To learn more, contact us at (707) 509-5565.
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IMPORTANT: Information provided by Tavelli Co., Inc., any employees of Tavelli Co., Inc., or its subsidiaries is not intended as legal advice and may not be used as legal advice. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.
Tavelli Co., Inc. has over 40 years of unparalleled experience in the debt collection and receivables management industry. Our mission is to achieve the right balance between getting clients paid and being empathetic to debtor circumstances, through implementing innovative practices, hiring experienced people, and improving business decisions through analytics. We provide peace of mind to all involved by collecting money with no complaints. Tavelli Co., Inc. takes the time to carefully listen to your customers and share their feedback with you through meaningful data and transparent communication, so you have access to the information you need to make quality decisions and improve your processes in the future. Contact us today and let the debt collection experts at Tavelli Co., Inc. help you set your business up for success.
IMPORTANT: Information provided by Tavelli Co., Inc., any employees of Tavelli Co., Inc., or its subsidiaries is not intended as legal advice and may not be used as legal advice. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.
