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Making the Call: The First Step to Collecting on a Delinquent Account

Written by Lee VandenHeuvel

Note: this is the second blog in a series that provides insider tips on commercial and b2b debt collection. Read part 1, How to Collect Debt from a Delinquent Commercial Account, here.

When you have a client on the line who's been delinquent in their payments to your company, it's important to tread carefully to ensure your best chances of collecting your unpaid debt. As a commercial collection agency in Michigan in business for more than 40 years, we know this is a key moment in ensuring you'll be able to collect on the outstanding payment. Here are the steps you should follow for an productive conversation:

  • Identify the customer and the individual you are speaking with. Discussion with the wrong person is a waste of your time and potential trouble if the debtor gets upset over improper disclosure of information to parties that should not have this information.
  • Identify your company and yourself, after you are sure you have the correct party. Give the full name of your company and yourself. Speak slowly and distinctly.
  • Identify the reason for your call such as “Mr. Smith, this is Joe Johnson with ABC Corporation, and our records indicate that you owe $1,543.00. Will you be mailing the full payment to our offices today?” Don’t hedge, but also don’t overdo it and try to intimidate. Be business-like and professional at all times.
  • Psychological pause. Give the debtor time to respond, normally 10-20 seconds. Let him/her tell you why they haven’t paid. If it’s a legitimate reason, they certainly won’t hesitate. Avoid interrupting the debtor since it could cause you to lose leverage.
  • Listen! Let the debtor tell you his problem and if he is argumentative or hostile, let him blow off a little steam, within reason.
  • Determine a solution. It’s important not to terminate the conversation until you have reached some agreement on solving the problem, whether it is a payment plan, payment in full, or another acceptable solution. It’s important that you clarify with the debtor the reason for not paying. You must be convinced that the problems have been resolved and that the agreement reached is acceptable.
  • Write it down. Make notes regarding the date, time, and person you have discussed the past due account with. Follow up with a letter or email outlining and confirming the conversation of what you expect to happen and when.

Lee VandenHeuvel is President/CEO of Ross, Stuart & Dawson, Inc., a commercial collection agency in Michigan certified by the Commercial League of America. Lee has been helping creditors for 30 years to review and improve their credit/collection processes and is a frequent speaker at industry conferences.

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