Once a receivable has gone significantly beyond terms, the first step is to call the customer about the status of the payment. The most difficult part of a collection call is finding the reason for the delay. The best way to take control of a collection call is to follow a pattern.
Three common reasons for a non-payment are:
Intro: Hello [customer name], how are you today? This is [your name] with [your company]. I’m just calling to follow up on [invoice # ____ ] for [$ ___ ]. According to my records, your payment is [# of days] past-due. I just wanted to make sure there weren’t any issues with the invoice, and if there are, then I would like to help clear those up and determine when the payment will be made.
Conclusion: Wonderful! As you know, our terms are [enter term agreement here], and we want to ensure that all customer’s accounts are in great standing by collecting due accounts on time. Is there anything else we can do to expedite this payment? (if no) Okay, we’ll look for your check in the mail over the next few days. Thank you for your time!
After making phone calls, always remember to follow up either with another call, in person, or a letter 10 days later.
A strong suggestion is to keep the collection letters per series to a minimum. This way, it reduces the amount of time expected for a customer to respond. They are less imperative and sending multiple letters at a time will only prolong the process.
Other tips for collection letters include:
Letter Template: [box]
[City, State, Zip Code]
[Customer First and Last Name]
[City, State, Zip Code]
Dear [customer name],
As discussed before, you have a balance of [$____ ] that is [# days] past-due. We have corrected any issues within reason involving your payment. In order to keep your standing with our company, please pay the amount due within [ __ ] days. If you have any more issues pertaining to this payment, please feel free to contact us.
Invoice Number Service Date Amount Due Total
######### MM/DD/YYYY $______.__ $______.__
As stated before, some reasons for a customer’s delay in payment are legitimate. It is up to your company to investigate and interview non-paying customers, but at the same time maintain quality customer service.
Personal interviews are the strongest demand for payment, which is why the interviewer must be persistent yet tactful. The process is very similar to a phone call or letter, but the impact is greater. The first step is to confirm all information on the forms that were sent to the customer. Then, you should determine the problem (lack of funds, dispute, or refusal). If the customer still refuses to pay, there is no other way to receive payment than a collection agency.
In any case, do not forget to put the arrangements in writing when you have found a solution.