Collection

How to Make Collection Calls that Keep Customer Relationships

Julie Rains — Sun, 04 Apr 2010 02:31:31 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/how-to-make-collection-ca...

"Collections is the process of completing the sale," according to Abe WalkingBear Sanchez. As the endorsed Credit Consultant to the 4500 combined members of STAFDA and PEI trade organizations, he advises companies to make collection calls using a positive, sales-oriented approach.

Adopt a relationship-building mindset prior to making a call to collect on past due balances. Focus on uncovering customer needs, addressing concerns, proposing solutions, fixing problems, and continuing to promote your company as a valued resource to customers — especially those with potential for repeat business.

Research First

Some business owners may be able to pick up the phone and start a meaningful, rewarding conversation with customers...and quickly resolve any problems and collect all money owed within minutes. Some situations call for simple actions. For example, if you've shipped an off-the-shelf product and have a signature confirmation of its receipt, then making a quick call — without investigating the details of the transaction — is a reasonable next step.

Research is advisable when collecting payments on complex transactions or past-due invoices valued at thousands of dollars. For example, if your company has just delivered a newly developed chemical guaranteed to reduce water treatment costs, made a major upgrade to an office building, or added RDFa tags to a website, then taking a moment to review all communications and invoices before dialing (or making an office visit) can be crucial to having a productive conversation.

Review and have handy before making a call:

Proposals and statements of work

Sales agreements including special pricing, guaranteed delivery dates, and product performance requirements

Vendor compliance manuals

Invoices with original prices and balances owed along with due dates

Customer's mailing address, or email address for online billing

Documentation of orders and deliveries, such as purchase orders and customer signatures

Proof of compliance with customer requirements, such as lab test results indicating quality certifications

Call

Put yourself in a relationship-building frame of mind with the dual goals of assuring customer satisfaction and getting what's owed to your business. An empathetic, confident tone of voice invites honest discussion.

Take these steps:

Call your customer contact.

Tell who you are, what company you represent, and the product or service your company provided to the customer, even if your contact should know this information.

Explain that you want to confirm that the customer received the product or service according to specifications.

Ask if the invoice was received.

Remind your customer of the payment terms and due date, and ask if there are any issues yet to be resolved that your company can handle right now.

Request payment and give options for immediate actions: suggest a charge card payment over the phone or walk the customer through an online payment.

At some point in this conversation, the customer may explain to you why the invoice hasn't been paid. It's likely that you'll reveal a glitch in your company's or your customer's business processes; or an obstacle to your customer's ability to pay.

Problems you may encounter and possible paths to resolution:

Your customer contact is not the person who authorizes and issues payment. Determine who else is involved and what actions will spur your customers to release payment.

Your company didn't comply with sales agreements and vendor requirements. Address internal problems that resulted in service failures, such as a late delivery, incorrect packaging, or an incomplete order. Make adjustments to invoices for chargebacks and ask customers to pay corrected invoices.

The customer doesn't have records that your company performed as promised. Show documentation that you have fully complied; then ask the customer to correct its records, verify that all information needed to authorize payment has been received by the customer, and request payment (again).

There's a problem with the invoice or the customer didn't receive the invoice in time to remit payment by the due date. Make sure your company is set up as a vendor by the customer and that the invoice is complete.

The customer doesn't have the cash because of an unexpected expense, sudden fall in sales, or delayed payment from its customers. Ask for a renewed commitment to pay and revised schedule with due dates and specified forms of payment.

Timing calls can be crucial. WalkingBear, a recent panelist and featured speaker at the World Credit Congress in Dublin, recommends calling commercial accounts on Mondays, creating momentum that builds throughout the week. Call consumer accounts toward the end of the week, as many people get paid on Fridays. Begin with your largest accounts for the strongest impact on cash flow. And, don't wait until a bill is seriously past due but make a call quickly after the due date.

Finally, Follow Up

Document commitments and follow up to make sure everyone adheres to promises. If a customer doesn't pay according to agreed-upon terms after you've dealt with any operational concerns, then a different approach is needed. To get payment and encourage repeat sales, find an alternative way of doing business that doesn't involve consistently asking for payments on past due balances.

As WalkingBear emphasizes in Timely Cash Flow Tips:

It's critically important to manage accounts receivable because keeping customers current leads to repeat sales. Companies can't afford to lose customers during tough times, and one way to keep them is by making sure they stay current on their accounts.

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Deal With Collection Agencies

Jessica Harp — Thu, 30 Aug 2007 00:47:35 +0000

As anyone who has been through collections will tell you, the collection agencies tend to lie and to cheat in order to manipulate the collections process to their advantage. So how do you regain your power as a consumer from the collection agencies? By following these nine suggestions, you can stop screening your phone calls and turn the collections process to your advantage. (See also: Always Answer the Call: Expert Advice on Debt Collection)

1. Know your rights.

A common complaint is that collection agencies do not play by the rules. They make harassing telephone calls and threaten to kill your dog. Why are they allowed to do this? Because we let them! Most consumers do not know their rights, so we leave it to the collection industry to police itself.

So what is the best way to make that collections agent behave and stop threatening to kill your dog? Know your rights! Read, learn, and memorize the Fair Debt Collection Practices Act. (If you don't want to read through the legalese, our very own Linsey Knerl wrote a spot-on article highlighting the finer points of the FDCPA.)

Nothing strikes more fear into the heart of a collection agent than a consumer saying, "According to the Fair Debt Collection Practices Act, you are not allowed to call me more than one time per day and no more than three times per week. If you call again, I will report you to the FTC and the Attorney General's Office." The very fact that you are demonstrating knowledge of your rights will make them behave quicker than a stern look from their mother.

2. Know your debt.

Every consumer is entitled to a free annual credit report from each of the 3 credit reporting agencies. By requesting your credit report, you will have a fairly good idea of how much you owe and to whom.

One lesser-known fact about your credit report is that items generally disappear from your report after 7 years from the date of last activity. If you have an item that is getting ready to fall off your credit report, do not take any action on that account! You will restart the entire 7-year time limit. If a collection agent calls you about a bill from 6.5 years ago, do not confirm this debt. Confirming a debt will restart the 7-year limit. Ask them to send you any paperwork that they have on this bill. Procrastinate taking action on this bill for another 6 months, and the debt will fall off your credit report. In most states, you are not under any legal obligation to pay a debt that has not had any action for more than 7 years.

This advice does not apply if you are planning to purchase a home. Mortgage lenders will see all of your debt — no matter how old it is. If you want to buy a house, you will need to pay down most of your debt.

3. Keep a written record of every call.

When a creditor or collection agent calls you, ask the caller for their full name, the name of their company, and their employee identification number. Every employee will have some type of identification number, so do not let them tell you otherwise. Gathering this information, along with the date, time, and reason for the call, will assist you in filing any necessary complaints with the FTC and AG's office.

If you are being hounded or harassed by creditors and/or collection agents, consider buying a recorder for your phone. A recorder will further assist you in filing any complaints against a specific person or company. Just remember to tell the caller that the call is being recorded.

In my experience, collectors will behave if you start the phone call by politely asking for their employee identification information and telling them that the call is being recorded. Once again, these actions tell the agent that they are dealing with an informed consumer who will not hesitate to report them to the FTC or AG's office.

4. Attitude is key.

When a collection agency calls you, they are expecting to reach a very rude and aggressive consumer. Imagine what a loop you will throw them for if you are calm, polite, and cooperative!

As difficult as it may sound, maintaining your composure allows you to have the upper hand when dealing with collection agents. As I stated earlier, the collections process is a game. The more composure you have, the more power you earn. This will translate into being able to set your own terms with the collection agent.

5. Keep your creditors informed.

The moment you know you will not be able to make a scheduled payment, call your creditor or collection agency. Usually, they will work out another payment option for you, or they might waive your scheduled payment. Creditors and collection agencies are less likely to work with you if they have to hunt you down. So, take the initiative to call them. Explain your situation and ask how they can help you.

Additionally, if you move, it is your responsibility to inform your creditors or collectors of your new address. If a creditor or collector cannot find you but can show they made a good faith effort to contact you, they can pursue legal proceedings without your direct knowledge. The next time you go to apply for a job or for credit, you might be surprised to learn that your wages are being garnished or that you have legal action listed on your credit report.

6. Get everything in WRITING!

Let's say your great attitude and cooperation has gotten the collection agency to agree to accept your suggested monthly payments. Do not send any money until you have this agreement in writing! Collection agencies are infamous for reneging on verbal "agreements".

If you pay a debt in full or work out a settlement offer with the creditor or collection agency, make sure to get these actions documented in writing.

7. Stick to your guns.

Never agree to a payment plan you know you cannot afford. If you know that you can afford to send the creditor $10 per month, tell them that. They will try to pressure you into paying more than you can afford. They will tell you to borrow from grandma, your church, or your kid's piggy bank. Do not allow them to tell you how much you can afford!

8. Never refuse to pay.

In the course of politely explaining to your creditors that you cannot afford their suggested payment of $250 per month, they will ask, "So, are you refusing to pay your bill?" No matter how angry you are, do not fall for this trap. They are trying to provoke you and have you on record as saying that you will not pay your bills. This will be used against you in court. Instead, calmly say, "I did not say that. I said I can only pay $X per month." If you continue to restate that you can only pay a certain amount per month, the collector will usually get so angry that they will hang up on you, or they will accept your offer.

9. Never give a collection agency access to your bank account.

Creditors and collection agencies have been known to take more than the authorized amount out of people's bank accounts. By providing them with your bank account information or by paying with a personal check, you are enabling this practice. Send payments by money order or Western Union. Not only will you protect your bank account information, but you will have another record of payment for your files.

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This article is from Jessica Harp of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: