The prime job of the person responsible for the collection of accounts receivables, or more commonly known as the telephone collector is to collect the money as close to the agreed terms as possible. There should never be any doubt as to why the telephone collector is engaged in this work. Always bear in mind that the customer has an obligation to pay debts within terms. It is the job of the collector to make sure that this obligation is met. The tone of the collection effort may be easy at first, but should be escalated and accelerated as much as necessary to ensure payment of the account.
Likewise, as what I have said in the past, after the initial contact with the debtor, it is important to keep additional contacts on a strict schedule. If the collection representative/ collector is told that a partial payment, which is not always acceptable, but unavoidable, will be sent in a few days for instance, that information should be noted and a promise of payment scheduler must be created. If the payment is not received at the promised time, a follow-up is essential. Otherwise the collection effort may become ineffective. Systematic follow-ups of accounts, even those which cannot pay immediately, indicated the serious nature of the outstanding debt and emphasizes the importance attached to it by the creditor, then in itself is an important collection advantage. Thus systematic follow-up, especially with the use of present technology is one of the key factors in a successful collection result.
Once the telephone collector gets the borrower to talk about the said account, the collector is well on the way toward receiving payment. That is why emphasis is placed on inviting the borrower to talk. The collection effort could simply made by calling the client through phone or by sending a form letter through fax or by email. The object of the discussion is getting the borrower's explanation of the delinquency. It may be a question of misunderstanding some provisions in the contract; it may be due to a temporary shortage of funds; or the borrower may intend to hold off payment so the creditor's money can be used in its own business.
Incidentally, if the collector opted to send a letter instead of making a call, always bear in mind that the purpose of such activity is still to collect the money. There are several types of letters that can be used as template, but the most effective are what we call “appeal lettersâ€. As the term implies, the letter are sent to make an “appealâ€. It could be appeal to honor, pride, justice, good credit standing. Sending this kind of letter is not an exact science. The sender hopes that one of their appeal letters will strike wanted response and ultimately result in collecting the money.
Finally, even though the delinquent client may be experiencing some difficulty in meeting payments, it does not preclude the account from becoming a good borrower in the future. It is therefore important for the collector to preserve the client’s goodwill while pressing for collection. This requires not only tact but also knowledge of the account. Incidentally, when there is only one choice to be made between collecting the money and preserving goodwill, always chose collecting the money. A client who does not intend to pay legitimate debts is not a desired client.
For comments, rejoinders and questions on credit and collection matters, email to elimtingco@yahoo.com.