Magazine article Business Credit

Collection Calls

Magazine article Business Credit

Collection Calls

Article excerpt

Use Tact and Planning to be Successful

During the past 20 years, more credit collectors are using the telephone to recover past-due accounts. From the friendly reminder to the final demand, personal voice contact is frequently employed because of the opportunity to respond immediately to a customer's defense for non-payment.

Time is money. The sooner contact is made with a responsible party who can address particular problems, the quicker one can expect a reply. From the customer's response, it should be evident whether recovery will be forthcoming or if follow-up action is needed.

The objectives of collection calls are to recover the money and retain customer goodwill. However, unlike letters that can be proofread and revised, spoken words cannot be taken back. Thus, pre-call planning and a calm demeanor, void of harsh, demanding, and offensive language, becomes all important. The person receiving the call is a human being with feelings. They have good days and bad days; they are affected by events in their lives. Treat them with courtesy, dignity, and respect.

A personable collection call can be firm, but fair; the caller can say "no" with a smile. A sinister tone of voice or words of malice and personal attack are best avoided. What the listener should hear is a questioning, concerned, firm, conciliatory, helpful, articulate caller. Which is the right mode? Time, experience, and the listener's response will refine and guide the caller's approach.

Hold Your Tongue

Avoid certain words or phrases such as "rip-off," "you lied," "you are being dishonest," "you must," and "there's no alternative." Terms that express finality or reflect disparagingly on an individual's character only provoke hostile and defensive responses. Recovery in such an environment will be poor at best, with a typical result being the loss of goodwill.

These words and phrases remove any room for negotiation. The receiver has only two choices--to do as demanded or do nothing. Be tactful, respectful, and precise in articulating the situation, and be prepared to listen. Honey catches more flies than vinegar.

Pre-Call Planning Requires Account Review

Once the decision is made to call a customer, advance planning is important. Know all the specifics relating to the collection item(s). With a major customer, consider asking the credit manager to make the call, especially if the manager has had prior personal contact with the customer; this gives the impression the account warrants special attention which can be beneficial.

Pre-planning requires a review of the account and previous activity. Questions can be answered to provide background and serve as a starting point for discussion. A pre-call planning form will help answer these questions.

From the payment habits, form a sense of an account's normal intentions or inclinations. Discounting customers with past-due invoices have either overlooked the bill or require resolution of a shipping problem.

On the other hand, a slow or inconsistent payment pattern suggests different problems may exist such as stalling, cash flow, poor bookkeeping procedures, or financial difficulty.

Be sure to check all sources for credits that may be due or for product returns. If the amount is large, contact the sales force to inquire if they may have received any checks or if potential problems might exist. Are delivery receipts available to support the invoice(s)? This type of information helps deflect any stall tactics.

Previous collection efforts should also be reviewed. Were letters or calls employed? Who was contacted? What response was received? With this information, follow-up action can be taken.

Prepare a Call Sheet

Upon completion of the pre-planning account review, the call can be made. A call sheet (Exhibit Two) containing specific information and space for comments, is recommended. The format is a matter of individual choice. …

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