Effective Debt collection techniques

As a business, you will always have your share of non-paying or slow-paying clients. Bad debt can affect your business irrespective of its size. You have to think twice if you want to handle these hard clients by yourself. It makes a lot of sense a professional collection agency. These professionals are highly skilled in legal protocol and collection strategies. Therefore, you can confidently hand over this task to them.

Debt collectors will determine the best way to collect your debt depending on the type of debtor. Some debtors need less persuasion than others. In some case, just a letter from the collection agency will force them to pay the outstanding debt. However, we have difficult clients who will do all they can to avoid paying their debts.

You need a lot of perseverance, skill, and patience to handle difficult debtors.  You can identify the type of debtor by his/her attitude. Some may want to convince you that they can’t pay. Using the wrong strategies to collect the debt can have adverse effects to your brand. Here are some of the effective debt collection techniques that you can use.

  1. Contact the Right Individual

Make sure that you are talking to the right individual in the debtors’ organisation. Don’t allow debtors to refer you to a different individual as this may engage you on a non-productive merry-go-round.

  • Be Firm

Make it clear that you are expecting the payment that the debtor owes your brand. You have fulfilled your part by supplying the goods or providing the service, and you have the right to get the payment.

  • Be Professional

Talking to hard debtors may be aggravating. However, professionals will always keep cool all the times. Therefore, you need to be patient but firm by adopting an indifferent and professional attitude.  Don’t raise your voice or shout, threaten or abuse the debtor.

  • Be Focused

Some debtors will want to divert you to the problems that are making them not to pay. Avoid listening to personal stories and many excuses. Maintain a tight rein on the conversation at all times by maintaining the purpose of your meeting. All you need is a payment or getting a commitment from the debtor.

  • Ask Questions

In case the debtor makes some excuses, interrogate him on that account. Several questions will make the debtor provide believable answers, and the truth will slip out in the barrage of stories. Some debtors think that you will accept lies without question. Persistent questions will make the debtor uncomfortable and may keep on coming with more lies which may not add up at the end.

  • Report the Debtor to Credit Rating Agencies

If none of the above measures works, you can go ahead to report the debtor to the credit rating agencies. This step applies to debtors who are exceptionally stubborn. Inform the debtor that you are forwarding his details to the credit rating agencies. Such a threat can make them pay off their debt. If not, follow the threats with the action and the debtors will begin to look for you.

  • Litigation

This step should be the last resort. Warn the debtor that you intend to file a lawsuit against him. If he doesn’t heed to the warning and fails to pay, be careful to follow through a file a legal suit. The debtor will take the collection efforts with the seriousness it needs and affirm your credibility. These tips will make sure that you are collecting even the hardest debt within a short period.

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