Collecting Debt

…Okay, so we’ve all been there right? We do a great job of getting the customer, providing services to the customer and maintaining the relationship – then our accounts team, with one call, letter or email destroy all our good work! It’s no always their fault – it can be a process glitch but the way we communicate to customers is always our choice.

Be as rude as you like – are you kidding?

I remember being told by a senior manager in an organisation I once worked for that I could be as rude as I liked to someone who owed us money and the money was overdue. I remember being a little perplexed at the time because on the one hand, we were treating them as business partners and looking after them as best we could but on the other hand treating them like criminals the moment their account went overdue. This didn’t sit right then and doesn’t now. In fact if I am the customer and for some reason my account is overdue, I respond very differently to a company that still treats me with respect than one that fires off some automated communication that threatens to destroy my life in some way.

So what is it that drives this behaviour? It seems very short-sighted to risk a longstanding relationship (or indeed a promising relationship) to take the high ground and rudely treat a customer when there is probably every chance the customer is going to pay the debt and buy more services. Now don’t get me wrong, if someone refuses to pay or is consistently making excuses as to late payments without discussing a solution, you may want to fire them as a customer but these are normally the exception to the rule.

Seven tips to help you

Here are a few things to remember when collecting debt and keeping up a good relationship with customers:

1. Ensure the whole business is one in which customer service and customer interaction is highly communicated. If you’re in sales, get to know the accounts team. You could even ask them to let you know if one of your customers is overdue on paying their account so you can talk with them

2. In your accounts collecting strategy, have some method to check in on customers if their payment is overdue. You may automate a communication but don’t threaten stuff immediately. Gently remind them that the account is overdue and some steps for communicating back to you. Make it easy for them to pay and remember you want them to want to pay

3. If people owe you money, they probably owe others too, so don’t assume they will pay you before others. Create a good relationship so they will want to pay you first. If you are rude, demanding and unhelpful, you will go down the list rapidly

4. Don’t be shy to pick up the phone. They owe you money so you have the right to ask for it. Just remember you will be asking them for business again, so you want the relationship to work. It’s better to let them know that your business relies on their money as much as theirs relies on your services or products. Help them have some options to pay.

5. Have all the details in front of you in any debt collecting situation. Be ready to answer their questions and know your dates and agreements.

6. Get a commitment from them of some sort. It’s not unreasonable to ask for the money – but you can reason with the customer.

7. Always be professional and give options.

You will always get more long term out of a customer if all your communications are positive and provide service. Ensure that the accounts department has customer service high on their list of communication skills as well as the ability to negotiate. As for me, I never took the advice of the senior manager unless of course I felt the customer was never planning to pay in which case, we didn’t want them as a customer anyway. Then I felt able to take a couple of nasty pills and let them know what I really thought of them! (Satisfaction indeed!) Still, I’d rather have the money.

If you’d like a bit more information on successful debt collection, check out our 1 minute video on collecting debt here:

For more details on qualifications in Credit Control, check out: