6 Keys to Collection That Will Help You Get Paid
Business owners perform collections for one reason: to get paid. An effective collections plan is an integral part of your accounts receivable management plan. After all, collections affect your bottom line. The question is, though, not how to perform collections. The question is: how can you get paid from collections? These 6 keys to collection will help you get paid.
Key #1 - Be Prepared
The first key to effective collections is to be prepared. You need to have a plan in place that will give you all of the information that you need. When you are more prepared, you are more confident on the phone. When you feel more confident, you’re less likely to back down or need to get information that the delinquent payor requests. You’ll have it on hand.
At the very least, you need to know the following:
- The invoice number;
- The date the invoice was issued;
- The amount that is past due;
- How long the account has been past due;
- The last time a payment was received;
- The amount of the last payment;
- The services on the invoice;
- Understand the payment history associated with the account;
- Whether there are any disputes about the current invoice or any past invoices.
This will help you answer any questions asked about the account.
Key #2 – Know Your Opening Statement
Knowing your opening statement in advance will help you feel more confident. You’ll be able to accurately identify yourself, the company you represent, and why you are calling. You should also include a call to action such as, “I’m calling to take your payment over the phone. Would you prefer to pay with your debit card or credit card?”
Key #3 – Ask the Right Questions
You have to be able to ask the right questions in order to ascertain the type of debtor that you’re talking with and when you can expect a payment. In our Phone Collection Basics, Part II we discuss the three types of debtors.
Some debtors will tell you they can’t pay you. In that instance, you should ask, “Are you currently working?” They will likely say yes and that they don’t get paid for a certain amount of time. Your next question should be to inquire about the date they get paid. When they answer, offer them a reasonable payment amount to be collected by your company the following day.
Once you’ve asked the right questions and determined a day that they can make a payment, follow up by mailing them a confirmation letter. You should also call them the day before you expect the payment and confirm that it will be paid on the aforementioned date.
Key #4 – Clarity Is Key
Communication is a two-way street. However, one of the most important things to keep in mind about collections (or any sort of communication) is to make sure that everyone is on the same page. Everyone should know what is expected of them. In this instance, what is expected is the debtor to make a payment of a certain amount on a certain day. Don’t expect them to write it down the first time, and don’t assume they don’t need you to call and follow up. It is your responsibility as the professional to be clear and to make sure that there is no misunderstanding about what is expected.
Key #5 – Active Listening
Active listening is imperative to a successful collections call. Active listening means that you listen to what the debtor has to say. Don’t interrupt them when they speak. This is their opportunity to talk with you, a person who understands their account, about their concerns. The only way you can find out about concerns is to actually listen. That means that you’re paying attention. You’re asking clarifying questions at the right time. You’re not half listening and formulating what you’ll say when they stop talking.
Key # 6 – Be Empathetic
It can be hard to be empathetic toward someone who owes you money, but if you want to collect more money, you should provide empathy. The fact of the matter is that when you call people and try to collect, they will get emotional. You’ll hear all about things that most likely aren’t even associated with your collections call. Be compassionate and offer a solution such as a payment plan or even provide them the information for Hello Finance Manager so that they can get their debt paid off in full. Being empathetic makes the call easier for all involved, and you’ll also sound more professional.
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