Collecting outstanding debts is, unfortunately, an unpleasant reality in the business world. You have put your valuable time and resources into providing services to a customer, and you deserve payment on time and in full. However, that’s not always the case, and when invoices are outstanding you need to collect on these.
Debt collection discussions can quickly become uncomfortable, messy and unprofessional if not done in the right way. If conversations with a debtor are not handled firmly but also sensitively, the situation can soon descend into an outright confrontation.
Here are some constructive pointers on how to keep a debt collection conversation productive and on track. Remember, the ultimate aim is to receive payment in full on the debt and, if possible, maintain a civil and professional relationship with the customer involved.
Open the Conversation Courteously
When opening the conversation with the customer, be forthright, clear and transparent. You will need to explain why you are having this conversation and give them the details of the outstanding debt.
Once they understand what you are seeking to achieve, it’s time to listen empathetically to their reasons for not having paid the debt. Be careful of making quick assumptions because in some instances, there could have been a mistake or the amount owed may have been paid already but not recorded.
Understand the Customer’s Situation
You need to get a full understanding of the customer’s situation so that you can begin negotiating a solution. A confrontational attitude will either raise the customer’s hackles or put them on the defensive – both of which are emotional states that are not conducive to solving the problem.
When you know why the customer has not paid the debt, you can begin to discuss a possible way forward concerning repaying the debt. Make it clear that you are amenable to presenting various options. Discuss the different possibilities in detail until you find a solution that is workable for both parties. The possibilities for repayment could range from paying an agreed regular installment if the customer cannot afford to make full payment immediately, through to the ideal solution, payment in full.
Clarify the Terms of the Repayment Plan
When you have both reached a solution, reiterate the detail the terms of the debt repayment plan. Ask them to acknowledge they understand what they have agreed to and remind them of the consequences of not following through on the agreement. Failure to comply could involve legal action or turning over the debt to a professional debt collection agency, like Boston Commercial Services.
After concluding the conversation, draft the physical debtor’s agreement as soon as possible. Please send a copy via email, post or fax and ask them to confirm receipt of it.
When the time comes for the agreed-upon payment, remind the customer via email and, if necessary, in a phone call, of the amount, the date and the payment details they need to fulfill their side of the agreement.
In all conversations, it is most important to remain in control and adopt an attitude that is positive, understanding and patient with the debtor if you hope to reach a win-win outcome for both parties by the end of the debt collection process.
Boston Commercial Services has experienced and professional debt collectors Sydney whose speciality it is to recover your debts quickly without putting your client relationships at risk.