Unfortunately, calling a client and demanding payment is not an effective way to collect a debt. Not only does it look unprofessional, you can end up scaring off your customers. It is difficult not to become cynical when working in credit control but remember that some customers will have a legitimate excuse for not paying on time but sometimes they will just be unable to make a payment, that’s where you need to be able to negotiate.
Start with a reminder – If a client’s account becomes overdue then you need to contact them. It is possible that they misplaced the invoice or never received it in the first place. Begin your call with a polite reminder that they need to make a payment. A professional and polite approach will help to maintain a healthy relationship with clients and also means they are more likely to comply with your wishes.
Take the time to understand – If the customer was aware of your invoice and they didn’t just forget to pay it then take the time to understand why they were unable to pay. It may be that you can negotiate with the client to resolve the issue. If the client goes on to refuse your suggestions then ask them if they have another solution. This will show that you are taking the negotiation seriously.
Have a plan – Go in to the negotiation with a definite minimum amount that you would be willing to accept. If you decide to enter in to a payment plan then the agreed amount should be one that the client can realistically afford to repay but that is substantial enough to pay off the debt in a reasonable amount of time. Stand firm to your plan, if the customer offers to repay less than your minimum amount, refuse immediately, this will send a clear message that you are not willing to write off the debt or wait an unreasonable amount of time for the debt to be repaid.
Don’t force them – If your customer is still unable to make a payment then don’t force them into a payment plan that they won’t be able to keep up with, that won’t benefit anybody. If possible, extend your customer some time to organise their finances and revisit the debt after a few weeks.
If you are unable to negotiate a payment from your customer then it may be worth considering hiring a debt collection agency, like Commercial Domestic Investigations.
At Commercial Domestic Investigations we offer a range of services to assist your business with its credit control. Using a debt recovery agency can benefit your business, it allows you to focus on newer debts and use your valuable resources on more important tasks. If you want to find out how we can help you, contact us on 08444 159 200 or email email@example.com.