4 Things That Make Up a Successful Debt Collection Strategy
All Successful Debt Collection Strategies Have These 4 Things in Common
A debt collection strategy plays a major role in business operations and continuity. An effective debt collection strategy helps save time, reduce costs, and maximize resources. Businesses must adapt time and cost effective ways to guarantee continued cash flow.
Businesses should integrate all the customer’s details in one system for easy access. This eliminates the process of jumping from one system to another for customer information. With an effective debt collection strategy, you can reduce wasted time and start collecting. Ask any high risk merchant account provider and they will tell you the same thing!
Below are the four key elements that will help your business get back on track and collect outstanding invoices.
Customer Friendly Operations
Setting up customer oriented payment options offer easier and quicker ways to collect outstanding balance. Web-based and app-based payment methods are secure, convenient, and easy making these the most preferred ways to collect payments these days. These advanced methodologies allow debtors to monitor accounts at the same time be constantly reminded of payment schedules. With easier payment plans and options, debtors are willing to work out payment plans.
Consider the communication channels your customers can be easily reached. It is also worth considering which mode of communication your debtors are more responsive. Others are into emails while some are more comfortable with texts or calls.
Make use of the technology to set-up auto reminders through texts and emails. Constant communication with customers will eliminate the time and costs for debt collection process.
Flexible Payment Terms
Immediately notify debtors of the disadvantages of unsettled debts. Clear communication allows the merchant owner and debtor to discuss reasonable and attainable payment options. Flexible payment terms allow the debtor to pay off the balance at the same time for the merchant to take the money back.
Yes you are a collection agency with a job to do, but remember these are people. Empathize with your debtors; know the reasons why they are not able to keep up with the payments. Reach out to your debtors; listen to their reasons why they cannot pay. By listening to their issues, you can come up with payment terms that will fit their circumstances. By empathizing, you can also get them to agree with the payment options.
Collections Management System
Setting up a centralized collection system allows debt collection staff to access the delinquent accounts in one system. A centralized system has all the information for each account receivable which can be viewed by collections personnel and account manager.
A centralized collections management system is not only convenient, but an efficient tool for decision makings and customer service support.
Developing an advanced debt collection system eliminates the time and energy on checking one report to another. Those precious hours must be spent on getting in touch with your debtors and collecting money.
It may be challenging and difficult to collect payments from debtors, but incorporating these four (4) key elements in your debt collection strategy or flow will help your business from big losses.
Most of all, you can retain debtors and turn them into valuable customers while ensuring business and financial stability for your company.
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