As a business of any size, you may at times need to collect on overdue invoices. Having a formalized debt collection process will minimize the potential for cash flow issues in your organization. After all, you need to be able to pay your employees and your own obligations. Things can become complicated when dealing with loyal customers, fellow businesses, and people you do not want to upset. Maintaining your reputation when collecting debt is essential.
Your Accounts Receivable and Collections Impact Your Reputation
Before we share some tips, picture this scenario:
Imagine that you borrowed $50 from a friend a few weeks ago. You had promised to give the money back within a month and you completely forgot about the due date. They remind you the next time you meet. Since you don’t have any cash on you, you tell them you’ll send it the second you get home. By the time you get home you have forgotten about the conversation, but remember a few days later and put the money in the mail.
Was there anything malicious in your delayed payment? No! Were you probably more inclined to pay your friend back quickly because of how they treated you and your friendship? Yes!
How would you have reacted if your friend had started calling you names? If they implied that you were a bad person or friend for not paying them back? You might have gotten angry and lost the friendship based on a heated conversation.
The same example can be applied to maintaining your reputation when collecting debt on behalf of an organization. If you treat your customers with respect instead of assuming the worst, you can preserve your relationship. Plus, it will make it easier to recover the debt.
Tips for Maintaining Your Reputation When Collecting Debt
- Always view your relationships with loyal customers as a partnership and not a one-sided agreement. A customer-centered collections process can transform how you communicate with your clients.
Having procedures in place will ensure you are working with your clients. Even if the heart of the conversation, collecting outstanding debt, is the same, a different tone and attitude can make a huge difference. This can include a friendly reminder email a few days prior to the bill’s due date and a friendly call if the due date is missed. Note the emphasis on friendly!
- Listen to the other company or representative when speaking with them. If you are too focused on what you’re about to say, you might miss helpful information. For instance, they may have a temporary cash flow problem. They might have partial payment now but were waiting to have the full amount to send to you. You can then discuss taking partial payment and setting up a payment schedule for the remaining balance.
Reading between the lines and listening carefully can make a huge difference. This may not only get you partial payment on the spot but also lasting loyalty from that customer. They might even actively try to find referrals for you or write you a positive online review.
- Have the same standard for everyone. An effective way you can maintain your reputation while collecting debt is holding everyone to the same standard. When you standardize the debt collections process, it will be apparent that you are fair and professional.
When you make exceptions, you can quickly get yourself in hot water. If one customer sees another received an exception and you won’t extend the same to them, your relationship with that first client may suffer.
An added bonus of having standardized procedures for your debt collection process is efficiency. Your team doesn’t have to keep reinventing the wheel or keep asking what rule applies to which client. This also makes training easier when you hire a new team member. Make sure your process is in writing and easily accessible in case there are questions.
If your own attempts don’t lead to a resolution of the situation, you can still call on the experts. Working with an experienced collections agency like Alacrity Collections ensures that you have no trouble maintaining your reputation when collecting debt. Besides, hiring an agency saves you a lot of time that you and your team can invest in other business-related activities.
Looking for Help Maintaining Your Reputation When Collecting Debt? We Can Simplify the Collections Process
Alacrity Collections is proud to be a leader in debt collections since 1982. Chasing overdue invoices is not an effective use of your time. Let our team help so you can work on running and growing your company. We achieve great results that are over twice the national average and treat all of our customers with dignity and respect. We work tirelessly to protect your brand and improve your net returns. To learn more about our services and get in touch, please call us at 1-800-752-9663 or email us at email@example.com.