The most successful businesses are those that implement effective debt collection strategies. This helps them to ensure that accounts are being paid and outstanding debts are being brought in, which in turn increases the cash flow coming into the business.
This is especially important because of today's sluggish economy and recession to examine and monitor your debt collection strategies and make sure they are performing and having the desired effect.
Third party debt collection agencies are professionals and they use proven tactics that yield effective results from past due debtors. Here are some of the strategies they use:
Reminder Statements
Sending a politely worded reminder letter to an overdue account holder can prove to be a very effective debt collection strategy. You may find that some customers may simply have misplaced their original bill, or the due date has slipped their minds. We all experience these types of oversights from time to time. Mailing a simple letter can remind them and you should find that many accounts holders will send in payment promptly soon after.
Reminder Telephone Calls
Taking a few minutes out of your day to call a customer with an overdue account can also be effective in reminding them of their payment obligation. While its possible to make the call yourself, you should be aware that some customers have very little regard for your business, your cash flow, or you. Its also important to remember that not all customers react nicely when asked for money. If youre certain you have the strength to face a barrage of abuse from some angry customers, then make the call with confidence.
Psychologically there are many customers who believe they have received the goods or services they wanted and the bill can wait until their own personal finances are in better order. This mind-set can be completely reversed by engaging debt collection agencies to make the call for you. People become alarmed at being contacted by a third party and will instantly believe their overdue account is far more serious than they first thought.
Collection Agency Demand Letters
Even after you've sent a number of statements and reminder notices, some customers will continue to ignore you. This is the time to hire outside collection agencies, who can employ a more stern and firmer demand letter. This can prove to be a powerful incentive to respond because of this third party impact.
Many customers fear damaging their credit rating, so the psychological thrust of being contacted by an external third party is often enough to worry many customers into action very soon after.
Employing Skip Tracing As A Tool
You may find that some of your delinquent customers may have changed their contact details since the transaction took place. This can make them very difficult to reach.
Third party collection agencies have a far greater range of search capabilities that include databases, software and many other tools that can help them find your delinquent customers even when you cant.
Legal Options
After you've tried all your debt collection strategies internally, still to no avail, it still isn't time to give up, throw in the towel, or write the debt off...not just yet. Collection agencies often have other legal options. If the case warrants, some cases can be referred to an attorney to pursue the matter legally. - 29866
This is especially important because of today's sluggish economy and recession to examine and monitor your debt collection strategies and make sure they are performing and having the desired effect.
Third party debt collection agencies are professionals and they use proven tactics that yield effective results from past due debtors. Here are some of the strategies they use:
Reminder Statements
Sending a politely worded reminder letter to an overdue account holder can prove to be a very effective debt collection strategy. You may find that some customers may simply have misplaced their original bill, or the due date has slipped their minds. We all experience these types of oversights from time to time. Mailing a simple letter can remind them and you should find that many accounts holders will send in payment promptly soon after.
Reminder Telephone Calls
Taking a few minutes out of your day to call a customer with an overdue account can also be effective in reminding them of their payment obligation. While its possible to make the call yourself, you should be aware that some customers have very little regard for your business, your cash flow, or you. Its also important to remember that not all customers react nicely when asked for money. If youre certain you have the strength to face a barrage of abuse from some angry customers, then make the call with confidence.
Psychologically there are many customers who believe they have received the goods or services they wanted and the bill can wait until their own personal finances are in better order. This mind-set can be completely reversed by engaging debt collection agencies to make the call for you. People become alarmed at being contacted by a third party and will instantly believe their overdue account is far more serious than they first thought.
Collection Agency Demand Letters
Even after you've sent a number of statements and reminder notices, some customers will continue to ignore you. This is the time to hire outside collection agencies, who can employ a more stern and firmer demand letter. This can prove to be a powerful incentive to respond because of this third party impact.
Many customers fear damaging their credit rating, so the psychological thrust of being contacted by an external third party is often enough to worry many customers into action very soon after.
Employing Skip Tracing As A Tool
You may find that some of your delinquent customers may have changed their contact details since the transaction took place. This can make them very difficult to reach.
Third party collection agencies have a far greater range of search capabilities that include databases, software and many other tools that can help them find your delinquent customers even when you cant.
Legal Options
After you've tried all your debt collection strategies internally, still to no avail, it still isn't time to give up, throw in the towel, or write the debt off...not just yet. Collection agencies often have other legal options. If the case warrants, some cases can be referred to an attorney to pursue the matter legally. - 29866
About the Author:
David P. Montana has been a noted industry expert, business advisor and author on the subject of collection agencies for three decades. He provides more valuable tips and information on debt collection strategies.
