Question

what documentation should you access prior to making a collection call?
how can you negotiate with customers so that both they and the organisation you represent are happy with the outcome?
hat sort of procedures might be in place to deal with accounts that are outside of agreed terms?

Answer 1

1. Document one must possess before making a collection call.
   1. Name of product purchased / Type of service provided
   2. Amount owed by the customer
   3. Payment due date
   4. Terms of sale
   5. Other invoices which may be open, but may or not be due.

2. Negotiation with customers for a win – win situation
   1. Get the debtor to acknowledge the debt by asking if there is any bill due
   2. Ask open ended questions
   3. Make the debtor right (even though he won’t be, but try to understand their point of view)
   4. Listen carefully what the debtor says and take notes
   5. Most importantly, be confident while speaking and avoid being rude.

3. Procedures to be in place to deal with accounts that are outside agreed terms
   1. Agreed terms must be rational and industry wide accepted.
   2. Interest amount should be charged for accounts that are overdue
   3. Reminders should be sent on timely basis to overdue customers
   4. A final notice should be sent along with a communication (usually a call or an email) to discuss the overdue amounts
   5. As a last resort, a formal letter of demand must be sent to the customer (cautionary approach as this might not be good for business relationship)
   6. If none of the above works, one should think of factoring the receivables (outsourcing the receivables to debt collection agency)