Basic Collections continued

Just exactly what do you say when making a collection call?

I was told by my first supervisor to ask for a payment schedule. I called up the customer, introduced myself and mentioned the name of my company and I asked for a payment schedule for the past due amount. Without hesitation the fellow on the other end said, “You must be new.” I thought that was amazing. I was new; this was my very first collection call. I followed the script. I did not mumble, hesitate, sound nervous or in any way give him a clue that this was my very first collection call, but he knew.

He went on to tell me, “We pay sixty days slow. Always have, always will.” See, if I’d known that, if I’d been there awhile, I would not have called him for at least another month. However, I’d done my job. I ascertained that the customer’s payment schedule was next month. I duly wrote it in my notes. I had achieved success of sorts.

Of course a more seasoned collector would have perhaps challenged the remarks and would have countered, telling the customer sixty days was unacceptable and in order to continue supplying product, payment had to be made immediately. At the time, this tactic my have worked. My employer was the leading supplier of its products and if we didn’t sell it directly to the customer, we’d sell it to a distributor who would.

The first objective of a collection call is to obtain answers to the questions “How Much?” and “When?” How much is the customer going to pay and when is he going to pay it? It seems elementary, but I listened to a so called collector for a small lumber company in Barstow who called a customer for money, spent twenty minutes on the phone with the bookkeeper, discussed husband, family, work, the weather and just about everything else without ever getting around to asking for a payment.

I observed a collector for an equipment company that was known for her ability to make more collection calls than anyone else in the department. She wasted no time. She called the customer, told them who she was and who she worked for and asked, “Are you making a payment?” The answer was invariably “Yes” and she was on her way to another call. She ignored what may have been missing invoices hanging out there in the past due columns and she failed to get a definite commitment. Had the customer sent a check in for a dollar, they would be satisfying the collector’s inquiries.

All too frequently the response to the initial collection call is a denial that the customer owes anything at all, because, despite the claims of the U.S. Postal service to the contrary, the customer has not received any invoices. Be prepared to support your payment request with the list of the open invoices, their dates and amounts. Also, be prepared to transmit them immediately, electronically if possible, then, ask how soon following the receipt of said invoices in the amount of x can you expect payment. Be prepared as well to furnish delivery receipts, purchase order numbers and any other documents you may have to prove the legitimacy of your debt. Have these handy because if you have to go in search of them, you will lose your momentum and the customer has a further excuse to delay payment.

It is critical that you, the collector control the conversation, otherwise, the debtor will seek to either delay payment, or pay short. Too often collectors are satisfied with whatever the debtor tells them. For example, a customer owes balances in current, thirty days past due, sixty days past due and ninety days past due. You ask for payment and you are told they’ll send you the ninety day balance at the end of the month. This is where a seasoned collector begins to negotiate; otherwise, to acquiesce is to give the customer ninety day terms by default. You must challenge the customer. Pay the ninety day amount now, and get a commitment for the remaining balance within acceptable time. Persuade the customer to explain why the balance is so far behind. Determine what is going on with the business that he is unable to pay current. Convince him further deliveries may be restricted. In other words negotiate, negotiate, and negotiate. That is the difference between the newbie and the experienced collector.

This is where Strategic Credit Management Solutions can help. We know how to collect and we are able to train your collection group to be to notch collectors. Good collectors bring in the money, not just payment schedules. See our website at http://powerscredit.com/. You may contact us at patrickpowers@sbcglobal.net. Your comments are welcome.