Collecting Debt from Difficult Customers
As an organization, you probably have overdue invoices that you want to get paid. But how do you approach your customers, especially the difficult ones, to collect these debts? Keep on reading as we take a look at the best practices to collect overdue receivables from difficult customers.
The process of collecting debts from difficult customers starts with good preparation. To make sure the conversation won’t result in an aggressive discussion and to increase the probability of successfully collecting the debt, preparation is a key factor. Here are a few aspects you should include in your preparation.
1. Have the facts straight.
Begin your preparation by gathering all available information around the unpaid invoice. When you have the facts straight, you can easily back up what you are saying.
2. Inform your customer.
Send all the information you gathered about the unpaid invoice to your customer before calling. This will eliminate the possibility for your customer to say that they need to take a look at the details before paying the invoice. If needed, walk your customer through the documents.
3. Be the man/woman with a plan.
Plan which steps you will take before contacting your debtor. Of course, you won’t know beforehand what the outcome will be, so make sure you plan what to do next after all possible outcomes. In the conversation with your customer, let them know that you have the next actions to take planned out for any outcome. This way, your customer knows you’re serious about collecting the debt and that there will be consequences for certain actions.
At the start of your conversation with your debtor, make sure to get straight to the point. Avoid small talk when calling your debtor and introduce the unpaid invoice immediately.
During the conversation, be direct but maintain a professional tone of voice. Never raise your voice, swear, or threaten your debtor in order to prevent an aggressive argument. Stay focused on the reason you’re calling your debtor. When the debtor tries to get you off-topic, politely bring them back to the focus of the conversation – getting your invoice paid.
Do not constantly interrupt your debtor, allow them to say what they want to say and listen. Let them know that you understand what they are saying. For example, when your debtor brings up reasons for not paying, say; “I understand why ...” or “I can see why ...” instead of immediately discarding their reasons. By being understanding, you prevent your debtor from going on the defensive. It will be much harder to come to an agreement with a defensive debtor.
If your debtor brings up a reasonable excuse for not paying your invoice yet, show sympathy and willingness to listen to their problem. Of course, you shouldn’t accept any excuse for not paying your invoice, but by being compassionate your debtor is more likely and willing to find a way to pay you.
At the end of the conversation, if you have reached an agreement, make clear what you both agreed upon and what the next steps are. If you did not come to an agreement, let the debtor know that you will be continuing the process and inform them about your next steps.
When you are unable to come to an agreement with your debtor, handing over your case to a Debt Collection Agency is the right move. This way, you won’t have to put time and energy into it and it eliminates the legal risks that are involved in debt collecting.
Not convinced yet about hiring a Debt Collection Agency? Make sure to read the article ‘Engaging a Credit Management and/or a Debt Collection Agency in 2021’, in which we explain the most important benefits of hiring a Debt Collection Agency.
Feel free to reach out to us if you have any more questions about debt collection. You can also fill out the form on our website or call us to discuss your debt collection case – this is completely obligation-free.