Waiting too long to collect


My colleagues think that my role is the worst possible in the company. This is mostly because my job involves calling customers for money. But I have a secret for you: I like making those calls. Rest assured, I’m not an extortionist who likes to torment poor souls. I just love what I do, especially knowing that I contribute to my organization’s success.


Most people feel uneasy and they shy away from collections work. Doing something they have never done before and on top of that asking for money? This creates discomfort, which in turn explains why many businesses wait too long to collect the money that is owed to them.


Some accounts receivable will be paid without you having to ask, some after asking, and others will be problematic. Calling your clients increases your chances of being paid ahead of others. When you are making a collection call, you are asking the customer to pay what is owed to you. They have already agreed to do so when they arranged to buy your goods or services. You can’t put off making those calls or else you risk not getting paid at all.


Arrange the call itself by following the 4 P’s of collections: be prepared, be professional, be punctual and be persistent. You need to start by preparing yourself. Get the necessary information on completed credit applications and call up your customers. Check the collection call history and keep the important information on your screen so you’re ready to go.


Next up is to be professional. If the customer asks for invoice copies, send them, but also confirm email addresses and other information. You have to keep the call polite and calm: never raise your voice, don’t interrupt and be patient. By removing all possible distractions you can discuss the main issue which is the money they owe you. Do not vent your exasperation on the person you are speaking to since they probably don’t control the timing of payments.


Like the old saying says, “time is of the essence”. Be punctual by keeping track of the customer’s promises and when they intend to pay. If the payment is late or less than expected, call back, and politely ask why that is. You should also analyze when your customers pay their bills. Some companies manage payments daily while others pay periodically (weekly, biweekly, monthly). Cut-off dates are very important to your clients (e.g., the last day that an approved invoice can be included in the current pay cycle). Encourage your customers to use electronic payment methods if they are available. This will save you a significant amount of time and energy.


My last advice to you is to be persistent. You can ask for any payment until it is received so don’t be shy. If the customer’s balance reaches 30-60 days past the invoice due date, consider 3rd party collection agencies. Don’t hang onto unproductive accounts and let those agencies be insistent if the need arises. Ask for your money before, during and after the due date of invoices to be effective. Call to make sure your customers have received the invoices, ask if they are in their system, and lastly if they are pending approval to be paid. Provide them with any additional documentation they need to process payments. By being proactive you will be able to deal with issues before they even appear.


Always remember to follow the 4 Ps. The key is to be organized and methodical approach in your approach to collection calls. There is absolutely no need to fear this type of work. And if you are still stuck, reach out to the Credit Institute of Canada who will recommend experienced Credit Managers to help you out.



Published under: Collections
Related content: