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Using The Telephone To Collect Your Past Due Accounts

One of the more challenging duties for any Credit Executive is collecting money by phone. Since this is even more difficult in today’s economy and with today’s technology, we are proud to offer some tips and hints we have found particularly useful in the recovery of past due balances. 

                                                        Preparation

It is important to study all the details available relevant to a past due account. Having a large customer base or being short on staff can make  reviewing each past due account difficult. When faced with either of these problems, we suggest allowing the dollar value of each account to act as a guideline. Typically, larger accounts require greater review. Your research should provide answers to certain questions. 

1. Have they been past due before? 
2. Is there a valid reason why they  should be delinquent now?           
3. Was the product or service requested by the customer delivered or provided as promised?           
4. Has the product been returned and was it authorized? 
5. Has a payment plan been established? 
6. Are there discounts involved?  
7. Is there special pricing involved? 
8. Does the customer qualify for extended dating?

If you are aware of these or other details before the call, you will be in a better position to overcome objections that may arise during your conversation.

                                                         The Call

The most important skill a good collector can possess is that of a GOOD LISTENER. Just as your voice inflection and the words you choose to use during your collection call are important, the words, inflection and nuances a customer uses can be critical to the resolution of a past due balance.

And of course, always be courteous, but in control of each conversation. Give your customers reason to pay the account that will benefit them.One of today’s most difficult obstacles to overcome is voice mail or the infamous answering machine. In reference to voice mail, your initial call should be directed to the person immediately responsible for “cutting the check.” Be sure to ask what position that person holds within the organization. If additional calls are necessary, they can be directed up the corporate ladder. Answering machines create a different collection atmosphere. Your approach to recovery should be different when an answering machine is involved as opposed to voice mail. Answering machines are typically used by smaller companies with limited financial resources. When either of these scenarios are applicable, messages that are left should create a definite sense of urgency.

When you reach the person responsible for paying the account, show the highest level of confidence during your conversation. Your statements should be indicative of your confidence about the fact that you expect the customer to pay the past due balance.

1. Identify your self and your company.  
2. Ask for the person immediately responsible for “cutting the check.” 
3. Give that person the reason for your call, ending with a request for payment in full today. 
4. Wait for an answer to your request for payment (your silence is important here, the next person to speak usually loses.)  
5. Overcome any objections your customer might have to payment in full (if there is a dispute, it will be uncovered at this time.)   
6. If payment in full is impossible, establish a payment plan (you should be governed by your corporate philosophy when accepting a payment plan, however, our experience tells us your plan should not exceed 120 days.)
7. Your phone call should end with confirmation of your agreement.            

                                                                Do’s and Don’ts

1. You should always be enthusiastic. If  you’re tired, get up and take a breath of fresh air, get a drink of water or just stretch out.
2. Always speak clearly and to the point. Never mumble.
3. Speak in a normal tone insuring a professional conversation. Never raise your voice!! 
4. Be positive — never negative.
5. Always discuss your situation — never argue or threaten your customer.
6. You must be firm but courteous — never inflexible.
7. Always be precise and to the point — don’t allow the conversation to wander.
8. Always be serious about the repercussions of non-payment — never  make idle threats.
9. Always end your conversations  politely— never slam down the phone.

                                                             Conclusion

We understand the actual collection of accounts can be infinitely more detailed. The application of these techniques will improve your telephone skills and help you to recover more money. L C Financial will be happy to answer any questions you may have regarding these techniques and can assist you in the review and revitalization of your current collection procedures. Call Toll Free 800-800-4523.