Halloween provides a great deal of material for small business owners to talk about their past due accounts.
Let’s face it – it is a nightmare to to be owed money. Every small business has a horror story about a late or non-paying customer. And to many, it is a scary proposition to chase delinquent customers – it takes a special skill set and personality, and it takes the focus away from sales and customer service. Some business owners dread the process so that they walk away from considerable income rather than ask for the money due them.
Doing some of your own in house collection can save you money and following some simple guidelines can take the fear out of in-house collection.
1) Review your past due accounts monthly. You must be disciplined about staying on top of receivables.
2) Develop a strong collection letter.
3) Designate one person as your main collection point person. The person does not have to be the only person working on collection accounts, but should be focused on it, and empowered to communicate within your company.
4) Establish a standard and escalating process of communicating with non-paying customers. Many companies use 2-3 notices and find a way to differentiate them. Some ideas might include PAST DUE stickers on invoices, invoices on colored paper, handwritten notes.
5) Write a script for collection calls. Have your staff practice making calls with each other.
6) Schedule a regular time to make phone calls. One of our clients had a monthly “Follow Up Friday”. Staff came casually dressed, and everyone made calls on delinquent accounts. There is a comforting safety in numbers.
7) Communicate your collection policies to all employees: sales team, drivers, front desk personnel and senior management. Consistency is key.
8) Make certain your process includes a way to escalate difficult files to senior management, and have clear process for determining when you need to refer accounts to an collection agency. Be disciplined in your approach and keep the process moving, because delay can cost you.
What tricks do you have up your sleeve? We would love to hear!
Happy Halloween from United Obligations!
Want to write a great collection letter? Download our free guide to learn how!