Businesses that are the most consistently successful are the the ones that have effective debt collection strategies in place. This ensures them that past due accounts are being paid and delinquent debts are being satisfied. This increases cash flow to the business.
It is especially important during this present economic crisis and recession to closely examine your debt collection strategies and make sure they are working as you wish.
Third party debt collection agencies are professionals and they use proven tactics that yield effective results from past due debtors. Here are some of the strategies they use:
Reminder Letters
Sending a politely worded reminder letter to an overdue account holder can prove to be a very effective debt collection strategy. You may find that some customers may simply have misplaced their original bill, or the due date has slipped their minds. We all experience these types of oversights from time to time. Mailing a simple letter can remind them and you should find that many accounts holders will send in payment promptly soon after.
Telephone Calls
Calling a delinquent account holder to remind them of their past due bill can be effective as well. Should you make these calls yourself, be aware that some customers care little about your business, or your cash flow. Since they already know they're delinquent, some customers could become defensive when they get your call. You can certainly do this yourself, just be prepared. However, you should always stay focused on the task at hand: settling the delinquency, ascertaining why the bill remains unpaid, and possibly working out payment arrangements.
Some customers may feel that after they've received the goods or services from you, they can be slow in paying you until they deem it financially suitable for them to do so. Debt collection agencies can interrupt this kind of mindset if they make the call for you. The psychological impact of hearing from a neutral third party can make them aware that the situation is far more serious than previously thought.
Collection Agency Demand Letter
There are some customers who will continue to ignore your repeated reminders and invoices. In these instances, it may be time to employ outside debt collection agencies who can issue firmer, more stern demand letters. Again, the third party impact can be a powerful incentive for customers to respond.
As many customers are concerned and care about damaging their good credit, these debtors will think differently after being contacted by a third party agency. This is often enough to prompt them into action.
Skip Tracing, Another Effective Tactic
Because we live in a very mobile society, some of your delinquent customers may have changed jobs, moved to another city, or changed other contact information. These customers become very difficult for your business to try to locate.
Collection agencies have an arsenal of resources, software, tools, databases and other options at their disposal that make them far more efficient and effective at finding otherwise unreachable delinquent customers.
Other Legal Options
After you've tried all your debt collection strategies internally, still to no avail, it still isn't time to give up, throw in the towel, or write the debt off...not just yet. Collection agencies often have other legal options. If the case warrants, some cases can be referred to an attorney to pursue the matter legally. - 31979
It is especially important during this present economic crisis and recession to closely examine your debt collection strategies and make sure they are working as you wish.
Third party debt collection agencies are professionals and they use proven tactics that yield effective results from past due debtors. Here are some of the strategies they use:
Reminder Letters
Sending a politely worded reminder letter to an overdue account holder can prove to be a very effective debt collection strategy. You may find that some customers may simply have misplaced their original bill, or the due date has slipped their minds. We all experience these types of oversights from time to time. Mailing a simple letter can remind them and you should find that many accounts holders will send in payment promptly soon after.
Telephone Calls
Calling a delinquent account holder to remind them of their past due bill can be effective as well. Should you make these calls yourself, be aware that some customers care little about your business, or your cash flow. Since they already know they're delinquent, some customers could become defensive when they get your call. You can certainly do this yourself, just be prepared. However, you should always stay focused on the task at hand: settling the delinquency, ascertaining why the bill remains unpaid, and possibly working out payment arrangements.
Some customers may feel that after they've received the goods or services from you, they can be slow in paying you until they deem it financially suitable for them to do so. Debt collection agencies can interrupt this kind of mindset if they make the call for you. The psychological impact of hearing from a neutral third party can make them aware that the situation is far more serious than previously thought.
Collection Agency Demand Letter
There are some customers who will continue to ignore your repeated reminders and invoices. In these instances, it may be time to employ outside debt collection agencies who can issue firmer, more stern demand letters. Again, the third party impact can be a powerful incentive for customers to respond.
As many customers are concerned and care about damaging their good credit, these debtors will think differently after being contacted by a third party agency. This is often enough to prompt them into action.
Skip Tracing, Another Effective Tactic
Because we live in a very mobile society, some of your delinquent customers may have changed jobs, moved to another city, or changed other contact information. These customers become very difficult for your business to try to locate.
Collection agencies have an arsenal of resources, software, tools, databases and other options at their disposal that make them far more efficient and effective at finding otherwise unreachable delinquent customers.
Other Legal Options
After you've tried all your debt collection strategies internally, still to no avail, it still isn't time to give up, throw in the towel, or write the debt off...not just yet. Collection agencies often have other legal options. If the case warrants, some cases can be referred to an attorney to pursue the matter legally. - 31979
About the Author:
David P. Montana has been a noted industry expert, business advisor and writer on the subject of collection agencies for three decades. He offers more helpful tools and information on debt collection strategies.
