Credit Policy for businesses and how to extend credit and manage credit risk

I spoke at a conference today and wanted to share with you a portion of what I shared at the conference.  Here are tips on making the dreaded debt collection phone call and handling excuses!

I have never met any business owner who likes making collection calls. Unfortunately, this is something every business owner must do or hire someone to do for them.  Making collection calls doesn’t have to be a horror show. First let’s outline the structure of the collection call:

Pre-call planning – never make a call without looking at the customers account history.

Opening –

• Identify the debtor
• Identify yourself and your company
• Ask for payment in full
• PAUSE (very important!)

Body of the call –

• Determine your approach, is this the first call? The fifth call?
• Overcome objections and excuses – Stay in control of the call!
• Establish the payment date
• Get an agreement from the debtor

Closing the call – Summarize the call, reiterate to the debtor the amount of the payment,      when it will be dropped off or mailed, and what will happen if payment is not made.

Follow-up – ALWAYS send a confirmation letter that also reiterates the closing. 

                     Call back IMMEDIATELY when payment is not received. DON’T WAIT!

• Identify yourself and your company
• Make sure you are talking to the person who has the authority to pay the bill or who signed the credit application.
• State the purpose of your call CLEARLY.
• Be professional – it is very easy to lose it during a collection call, stay professional, cool, calm and collected and if you can’t, then end the call and call back another time.
• Be respectful, do not talk down to the debtor, do not yell at the debtor and do not call them names.
• Ask for payment in full.
• Follow up!