How to collect debts


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Every business at some time experiences a customer who is either a slow payer, or worse still, refuses to pay at all. Few people enjoy harassing customers for unpaid accounts, but essential telephone skills go a long way to getting payment. 

A phone call is often the best way to do it. And if you have your script down pat, it’s the best kind of instant gratification there is. 

Be prepared. Have all the details in front of you before you make the call – know both the invoice and the delivery details, as well as a list of questions you need answered. This way, you can approach a debtor with confidence, and tick these off as you go through. 

Always be sure to speak to the decision maker. Know their name, and use it. If they are unavailable, find out when they will be back in the office and call them then. Leave your name as a courtesy, but don’t leave a message asking them to call you – it’s unlikely that they will. Never leave messages concerning the debt, especially on an answering machine, as this is a breach of privacy (you never know who may be listening).

When you do speak to a debtor, be sure to:

  • Be business-like and courteous, no matter how agitated the debtor might become.
  • Encourage answers by remaining silent at times (see below for more on this).
  • Listen carefully and adapt your approach accordingly.
  • Convey a sense of urgency by making deadlines.
  • When a payment plan is proposed, the debtor’s initial offer should always be refused. Confirm the agreed outcome in writing.

Don’t call: 

  • At lunchtime
  • On a Friday afternoon (or on a Friday at all!)
  • Too early in the morning 
  • After 4pm
  • If you have a part-time staff member who makes these calls, keep the times above in mind when negotiating the structure of their working week. 

The pause that pays 

Professional speakers know the power of the pause and use it to their advantage – it applies pressure through silence. 

This is the part of the conversation where you put the burden of conversation on the debtor. For example: “I need your payment no later than Friday”.

Then pause. 

Do not speak. 

Even if you are tempted, don’t. 

Instead, let your debtor fill the silence. This is a great way to get a commitment out of the most reluctant of payers. More often than not, they will give an undertaking to pay. 

If you don’t get a bite, ask a direct question: “When can I expect payment?” 

Once they’ve responded, be sure to repeat their commitment back to them: “Thank you very much. I’ve made a note that will be paid on Thursday and you’ll email me the remittance details.”

History in the making

For each account, you should keep a communication history. Here, you document the main points of your conversation. You can refer to this for future conversations. This also means that someone else can handle the account, as they will have all of the information at hand. 

Always be kind and courteous, never patronising or terse. As you get to know the client better, you can ask them questions that will put them at ease. Ask them how their weekend was. This also helps you to establish a relationship, making it harder for them to avoid your calls and your end goal – payment. 

Asking the hard question

Rehearse your answers the curve balls that might compromise your cash flow!

“I didn’t receive the invoice.” 

“I’ve got it on file here…” (which, of course, you do!) “… It was sent on [name the date]. I’ll forward you that email so you have it in front of you. Please note the terms from the date of invoice raised stands.” 

Hint: Be sure to send them the original file and follow it up with a phone call to confirm its receipt.

“I’m not the person who deals with the invoices.” 

“Please let me know who that is. I’ll amend the contact details and send that straight through.” 

Hint: do this straight away and call the new contact so they’re aware it’s there. 

“Cash flow’s tight at the moment – we just don’t have the money to pay you.”

Ah, this one is a tricky one and on no doubt you have fielded yourself! 

For larger payment plans, negotiate a payment plan and be sure to secure and a large, immediate instalment. 

For a smaller business, suggest they pay via credit card, as this will give them between 30 to 51 days, depending on their bank, to pay. 

Good terms

Be clear on your payment terms from the very start – they should be firm, not flexible. 

Don’t make the mistake of being lenient with new accounts under the guise of establishing a good relationship. This sends the message that your payment terms are flexible and gives them permission to take advantage of you. Once an account is overdue, no matter who it belongs to, follow it up. 

Some businesses have a client so crucial to their business that they are quite generous with their payment terms. A client should make, not cost money. If you present yourself as a low-priority creditor, they will treat you as such.


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