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11 views

Credit 04

Uploaded by

lab aq ni mama bleh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MODULE 04

Debt Collection Techniques


In this article, we’ll go over eight
successful debt collection techniques
you can employ to make the most out
of your aging accounts receivable.

Debt collection is arguably one of the


least fun parts of running a small
business. While most people would
rather avoid it at all costs, it will
actually cost you to avoid it.
1: Maintain Consistent Contact
When you lose contact with a
customer who has an unpaid invoice
with you, you’re decreasing your
chances of getting the invoice paid.
Keeping consistent and strategic
contact with your customer increases
those chances.
(sending a reminder email with a link to an online payment portal).
2: Make Payment Terms Clear
When there’s a contract or agreement
that specifies payment terms signed by
both parties, there’s legal backing if you
decide to file a claim with the courts.
With unclear terms and no contract, it
will be much more difficult to enact
debt recovery practices with success.
As a best practice, you shouldn’t begin any
work without a signed contract in place that
provides specific details on:

What you’re being paid for


How you’ll be paid
When payment is due
What’s considered late
Any consequences for late payment
3: Make Paying Easy
Handling payments online is one of
the easiest ways to stay on top of bills
these days. When your payment
process is inconvenient, it obstructs
your ability to get paid on time. That
impacts your cash flow.
4: Have Empathy, But Keep it
Professional
You never know what someone’s
going through that caused them to be
in outstanding debt. There could’ve
been a loss of income, or a life-
changing event affecting their ability
to keep up with regular payments.
Showing empathy when customers are
going through a rough time helps
maintain your relationship with them
and allows you both to come to a
solution on the overdue payments. This
might result in offering them a
payment plan to help them get caught
up.
Other times you’re dealing with
someone who is actively trying to
avoid paying. It’s important not to
make any assumptions about the
customer’s situation. Try to be
customer and solution-oriented.
Have empathy towards the
customer, but be direct about
resolving the issue.
5: Keep Good Records
When you’re pursuing payment on a
delinquent account, it’s important to
record each collection attempt. Include
the date you contacted them, brief
details about the call, and the results.
Your friendly reminder should be a
quick, light reminder that a payment is
due. Because perhaps they just forgot
with all the hustle and bustle of their
lives. This could even be an email if
that’s how you typically contact your
clients.
If payment is still delayed after that
reminder, there should be a past due
payment notice sent. Include the
amount they still owe and politely
request payment at the earliest
possible date. working within the
organization.
Still no payment? Time to send a final
notice. Your customer is no longer
within the terms of payment you both
agreed on. This contact attempt will be
more firm than the previous ones, it
should still include the amount of debt
and a request for payment by a
specified date.
Thank you.

• E-SOURCES
• https://www.investopedia.com/terms/c/credit.asp
• https://www.lendio.com/blog/successful-debt-collection-techniques/

• FOR CLASSROOM DISCUSSION USE ONLY

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