5 Tips to Increase Collections
Lack of cash flow is the major reason cited for new business failure. Collecting past due debts will increase cash flow. A phone call may prompt clients to pay invoices immediately or at least tip the company if a problem exists. Whether collection calls are made by employees from the call center or accounting department, the following five tips will improve collection rates.
- Training Sessions: Collection calls are often delegated to new untrained employees. Holding a training session will familiarize employees with rebuttals to many client excuses. Employees involved in collections should be informed of company credit and collection practices.
- Prepare: A well prepared employee sounds confident on the phone and may improve client relations in addition to collecting a past due debt. The collector should have computer access to client’s current and past due invoices. The amount owed, terms of sale, payment due date and products/services involved are also needed.
- Payment Plans: In a perfect world, clients would pay at the time product was delivered or service was rendered. Businesses generally operate on a 30 day invoice cycle. Sometimes a client falls behind more than 30 days. Clients will sometimes state that poor cash flow is the reason for nonpayment. Instruct employees to ask for a partial payment or set-up payment plans.
- Quick Response: A client will often state that a check has been mailed. Collectors should ask for the check number, amount and date it was mailed to note in the computer. A collector should have access to print and fax an invoice to clients that state no invoice as a reason for nonpayment.
- Angry Client: Sometimes a client may become angry during a collection phone call. Remind the client that the collector will try to resolve the problem if the client will explain the problem in a calm manner. If a client begins to yell or utilize profanity, it is okay to ask permission to call back at a more convenient time.
*Photo courtesy of Medical Collection Agency by Collection Services at Flickr’s Creative Commons.