Collecting money in a bad economy

BusinessWeek knows it is harder now, particularly for small companies with limited resources to collect from their past due customers during this troubled economy.

They interviewed me for a story on this topic a while ago and that article was so popular they have now done a follow up with more detailed information to help business owners collect their money in a bad economy.

Share
Posted in Being a Great Collector, Collection Calls, Collection Letters, Collection Tools, Collections for Creditors, Collections for Landlords, Credit Crisis, Credit Crunch, Credit Policy Questions, Customer Service, Debt Collection in the News, FAQ's | Tagged , , , , , , , | Leave a comment

Immediately improve your collections

You can immediately improve your collections if you follow these 4 steps right away with the accounts that have the largest past due balances.

You called John Smith this morning for the 18th time and left another message.  You found out that John recently bought a new truck and is renovating his home.  When you left another message this morning, you were told John is away on vacation.  You haven’t collected any money from John in months and your boss is chewing you out.

Since your phone calls are obviously not working, you decide to write John a letter.

Take these 4 steps:

1.  Make your letter brief and to the point, being blunt is best.

2.  Use a larger font in the important parts of your letter.

3.  Give them a payment deadline day, date and time, tell them what will happen on that date if no payment is received.

4.  Send this letter in a flat rate priority mail invelope with delivery confirmation.

I know what your thinking, priority mail envelope? How much is that going to cost?! You pick up the envelope for free at the post office or order them at their website, the postage is less than a gallon of gas, and isn’t that worth receiving much more in return?

 

Share
Posted in Ask Michelle, Being a Great Collector, Collection Calls, Collection Letters, Collection Tools, FAQ's, The Life of a Bill Collector | Tagged , , , , , , , , | Leave a comment

The Perfect Collection Call

I recently had someone ask me how to make the perfect debt collection call.   That was a new one for me, and made me wonder if there is a perfect collection call.

I didn’t have a perfect answer for this and so shared what I knew from my experience. Each collection call should have some basic principals.  One is to be prepared for the call, knowing everything about the account history, payment history, order history, average order amount, average amount of time to pay, etc.  Then the opening of your call, making sure you have the right person on the phone and introducing yourself and your company and stating why you are calling.  Then the body of your call – working with the debtor, listening so you can offer a realistic solution and agreeing upon a solution.  The final step in the call is closing the call – thank them, and reiterate your payment agreement before you hang up.  Once you hang up send a confirmation letter outlining everything you agreed upon in the call.

Share
Posted in Ask Michelle, Being a Great Collector, Collection Calls, Customer Service, Excuses, FAQ's, Getting Paid - Michelle Dunn - Business Finance Columni, Scripts, Telephone Collection Tactics, Training | Tagged , , , , , , , , | Leave a comment

How are you improving cash flow?

As a business owner you are always thinking of ways to cut costs and increase profit.

One of the easiest ways to do this is to improve your cash flow, get it coming in quicker and in full.  How are you accomplishing this?  Leave your response in the comments below.

Some ideas:

Look at your financials often.  Not once a month, not once a week, often.

Offer an early payment discount with short terms (4% net 10)

Communicate with your customers, thank them, follow up on orders, make sure they are happy.

Share
Posted in Being a Great Collector, Business Credit, Collections for Creditors, Credit Policy Questions, Customer Service, FAQ's, Getting Paid - Michelle Dunn - Business Finance Columni, Know your Debtors, Training | Tagged , , , , , , , , | Leave a comment

Do you contact neighbors when trying to find a debtor?

As part of your skip tracing, when you have to locate a debtor in order to collect from them, how many of you contact neighbors for location information?

How often do you do this?

Share
Posted in Being a Great Collector, FAQ's, Skip Tracing, Telephone Collection Tactics, The Life of a Bill Collector | Tagged , , , | Leave a comment

Debt Collection letters & forms

I am happy to share that my book of “Debt Collection letters & forms” is now available in paperback.  The e-book will be coming soon.  I also want to let you know that I have recently updated “Telephone collection call scripts & how to respond to excuses” and the newest updated versions are now available.

The letters in this book are for first party collectors, though as a third party collector, maybe you could use these to create your own letters.  You can use the letters in this book as they are, or modify them to suit your needs or your specific business or just use one sentence from a letter. Each letter should be on your company letterhead and include your company name, address, phone and fax, web address, email and any other contact information. The letters that get the best results are not “form” letters. If a letter looks like a form letter it loses some of its punch. The most effective letters are short, to the point and easy to read. Try to avoid long or confusing words and sentences. The more direct, the fewer misunderstandings. Have someone read your letter and see if they totally understand it. If they do, then chances are your debtor will, too.

Your letter is a reflection of your business; keep it professional. Remember that your letter is to persuade someone to send you money. Your wording and tone are critical, especially if this is a customer you want to continue to do business with. Always assume the debtor will pay. Enclosing an envelope for payment is always a good idea. You can also include an envelope with postage. The easier you make it for the debtor to make payment, the better your chances are of receiving that payment.

Collection letters should do two things: retain customer good will and help you get paid. You know a letter works well when you do a mailing and your phone rings off the hook when everyone receives their letters. If you send out a letter and there is no response, you need to re-work your letter.

Share
Posted in Ask Michelle, Bad Checks, Books, Collection Letters, Collection Tools, Collections for Creditors, Collections for Landlords, FAQ's, Getting Paid - Michelle Dunn - Business Finance Columni, Industry Trade Publications, New Technology, Online Collection Techniques, Telephone Collection Tactics, Text messages, The Life of a Bill Collector | Tagged , , , , , , , , , , , , , , | Leave a comment

Providing the validation notice to a debtor

As you continue to test yourself on the FDCPA, what do you send a debtor as validation of a debt?

How much time do you have to provide validation and how often do you have to provide this validation?

Share
Posted in Being a Great Collector, Books, Collection Calls, Collection Letters, Compliance, Fair Debt Collection Practices Act, FAQ's, Laws, Scripts, Telephone Collection Tactics | Tagged , , , , , , , | Leave a comment

What is considered FDCPA Harassment?

As you make collection calls to debtors, how do you determine how often to call so that it is not considered harassment under the FDCPA?

When a debtor hangs up on you do you call right back or how long do you wait to call again?

Share
Posted in Being a Great Collector, Books, collection agencies, Compliance, Education, Fair Debt Collection Practices Act, FAQ's, Laws, Scripts, Telephone Collection Tactics, The Life of a Bill Collector, Training | Tagged , , , , , | Leave a comment

How well do you know the FDCPA?

How well do you know the Fair Debt Collection Practices Act?

This series of blog posts will be questions to help you test yourself and your collectors on how well you know the FDCPA.

Please leave your comments and answers in the comment section.  Today’s question:

Can a bill collector call a debtors spouse at work regarding a debt?

 

Share
Posted in Being a Great Collector, Collection Calls, Compliance, Education, Fair Debt Collection Practices Act, FAQ's, Laws, Telephone Collection Tactics, The Life of a Bill Collector, Training | Tagged , , , , , | Leave a comment

Skip Tracing resources

Anyone who owns a collection agency knows you use many resources to skip trace debtors.  I wanted to share a list of some skip tracing websites recommended by the Skip Tracing Advisor, Ron Brown.

AnyWho

AT&T Directory Assistance

SuperPages

Switchboard

White Pages

Yahoo! People Search

International

Reverse Search

Share
Posted in Ask Michelle, Being a Great Collector, collection agencies, FAQ's, Know your Debtors, New Technology, Online Collection Techniques, Skip Tracing, The Life of a Bill Collector, Training | Tagged , , , , , , , , , , , , , , , , | Leave a comment