Many finance pros will tell you “Not much changes in Collections.” And that makes your job that much tougher.
There aren’t many revolutionary new techniques out there. But many customers are taking longer and longer to pay. Which means that without a little creativity, your company’s cash flow may start to suffer.
Doesn’t have to be that way.
Fortunately with even a few tweaks to your approach you can boost your staffers’ collection rates and your cash flow.
3 phrases with big pay off
Take a look at what works best right now:
- “How much are you short?” When a customer tells you it can’t pay the full amount it owes, your instinct is to at least get something. Smart move. But most companies follow up with “How much can you pay today?” That allows the customer to call all the shots; not to mention that person may woefully underestimate how much it can cough up. But by asking how much the customer is short, you’ll likely get a much more realistic view of how much that person can really pay you. No one’s likely to say they’re $15,000 short on a $20,000 debt – though they might tell you the can only pay $5,000 on the spot.
- “If you don’t pay this on time, we’re going to have to assess the late fees we’ve spelled out in our contract.” This is something your staffers want to put out early in the conversation, even before any negotiations start. A phrase like this introduces consequences and offers customers a reason to work with you. (Of course, you want to make sure your contract really does allow for them before staffers start throwing that out there.)
- “Just checking to see if you have any questions about your bill.” This may be the most important question you can ask customers these days. And make sure it’s being asked before that invoice goes past due. A completely “customer friendly” touch base will preemptively cut many of those nonpayment excuses off at the pass. Think your staffers don’t have time to add an extra round of phone calls into their day? Better to include this extra non-confrontational step on the front end than to have to spend more time on the back end trying to wrestle cash out of customers’ hands on the back end.
