Debt collection is one of the hardest responsibilities ever to complete by businesses, especially when you’ve got large accounts receivables.
Fortunately, there are now so many ways to go about with this, even if it has to mean going for partial payment options or setting up other payment plans.
Whatever your strategy is, there’s one very important thing to master: negotiation. This can mean negotiating for better terms, perhaps a grace period, or lower payments for this month.
Negotiating is never going to be easy, but there are always ways to go about it. You can always learn the tricks of the trade, so that debt collection would no longer have to feel so daunting.
This is an inherent part not just of debt collection, but also of ensuring that your business is going to run as smoothly as possible.
There are many ways to improve your business’ debt collection negotiations, and these include tips like the following:
1. Consider Every Interaction Or Communication As A Negotiation
Whenever you interact with and talk to clients or other customers, consider each of these interactions as a means to negotiate their debts. This is especially true when you’re dealing with debtors.
As soon as your debtors see that there’s a conversation that’s ongoing, then this already puts you at an advantage.
Not only does it remind them of their past payments due, but they’ll also be given that push that says you’re serious about your debt collection, and this isn’t one that you simply desire to set aside.
2. Practice Skip Tracing
When it comes to debt collection negotiation, there’s now such a thing known as ‘skip tracing.’ What is skip tracing, you may ask? This refers to the process of searching for those business owners and customers who have gone missing and have deferred or late payments.
Many years back, skip tracing was limited only to using manual means like file directories, phone directories, lists, and ledgers. Today, more automated means are being done, like using databases and public records to find individuals that are hard to collect from.
Some of the common public records that are used for skip tracing include:
- Information from various educational institutions
- Property deeds and taxes
- Business licenses
- Criminal activity or similar records
3. Give Fervent Reminders About The Debt
Another way to improve your debt collection negotiation process is to give fervent reminders about the details of the debt. It’s normal to find someone, even yourself, for instance, forgetting about certain payables of a debt.
So, it doesn’t hurt to start with fervent reminders of these payables. What’s there to negotiate about if the individuals involved have also forgotten about the specifics of a certain debt.
You can often start the negotiation process on the right foot when you begin with a simple, non-pushy, or non-confrontational reminder.
4. Demand Payment In Full
One of the biggest mistakes that could be committed when it comes to debt collection is the failure to demand full payment right from the beginning.
You have to start with a full payment demand, especially because it’s usually going to end up in a negotiation of breaking down with partial payments.
Right when you get hold of a debtor, be frank and say you’re calling for the full payment of a balance due.
When you do this, it creates the impression to your debtor that you’re serious about the debt due and that you’re here to collect the highest amount possible.
5. Bring With You Accurate Information About The Debt
Before you even start to negotiate, it’s important to have accurate information about the debt. This means you’ve got a strong grasp of all of the information pertaining to the debt. You can make stronger negotiations when these are all based on facts.
So, before you make that call to each debtor, make sure you’ve given yourself ample time to refresh on the details of the debt.
In refreshing on these facts, you can also equip yourself with ample research to find all the advantages of leverage you can use during the negotiation.
6. Check That You’re Dealing With Employees Authorized To Deal With Payments
One of the delaying tactics of other companies is to let unauthorized employees deal with the negotiations whenever debt collection is made. This is advantageous on their end but disadvantageous for you.
It’s important to give yourself that protection by ensuring that right from the beginning you are negotiating and talking with authorized representatives of the company. Otherwise, you could only be wasting your time.
As soon as you begin the negotiation, double-check first to see who you’re dealing with. If they’re not the ones in charge of the debts, then get hold immediately of the proper employee so you aren’t wasting your time.
Debt collection is a part of any business landscape. This is something you can’t forego, given that businesses go through so many accounts receivables and payables.
The bigger the business and the transactions, the more serious these debt collection concerns are going to be. As is the case with any industry, however, there are always good and bad ways to go about debt collection.
The tips above are going to increase your chances of success.