10 Things I Know About... Collections
Jeff DiMatteo is president of Marlborough-based American Profit Recovery. He can be reached at jeff.dimatteo@americanprofit.net.
10. Diplomacy
Using a hard-fisted approach to collecting overdue balances from clients does not work. Be diplomatic when you call on late-paying customers. In short, be nice, but firm.
9. Internal Procedures
Make sure all your internal accounting procedures are not working against you. Invoice on time and at regular intervals.
8. Customer Service Calls
A great way to get paid is to incorporate good old-fashioned customer service. Regularly call your customers to inquire about services and if they have an outstanding invoice, transition into when you might expect payment.
7. Know The Law
The laws around collections are very much in favor of the consumer and meant to protect them. You can find those laws by typing “FDCPA” or the “Fair Debt Collection Practices Act" into a search engine. Collection agencies must follow these laws and you should too.
6. Hiring A Collection Agency
When hiring a collection agency, make sure they adhere to a code of ethics and belong to the Association of Credit and Collection Professionals or (ACA).
5. Check References
Ask for a referral before hiring a collection agency. Just like you would when you hire a contractor for your home, references matter.
4. Cost
A collection agency doesn’t have to cost you an arm and a leg. Find a collection agency that can offer you a flat fee.
3. Be Flexible
If this economy has taught us one thing, it’s that we all need to be a little flexible. Try working out payment plans or other arrangements that get you paid and help you keep your customer.
2. Act Early
The longer an invoice goes unpaid, the less likely you are to recover what you are owed. Don’t wait six months or more to get assertive with your debt collections.
1. Know When to Get Help
There comes a time when you may actually be spending more on internal costs than with a third party. Staff time can be spent on more important tasks to help grow your business. With difficult debtors, you’ll need professional help to get back what they owe you.
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