During a meeting last Week, I was chatting with some other business owners from a variety of sectors. I laughed when one of them said to me in earnest, “You’d never know that you break legs for a living”. Although I really did laugh out loud it made me realise that there is a preconceived idea that people who work in collections are ‘leg breakers’ or ‘bullies’.
In fact, what we do is the total opposite of that. We fix things. The art of collections requires a multitude of skills. Detective work, mediation, negotiation and most important of all, communication.
Over the years I have found that Businesses owing money tend to fall into one of three main categories.
- Can’t Pay (Have cashflow or financial difficulties)
- Won’t pay (Want to keep what they have in their account for as long as possible)
- Should not pay (Have a problem or a dispute)
I remember one of my first collection training courses, I was told, “the person that shouts the loudest gets paid first”. This may be effective for some people, but there are far easier ways to get paid. We need to have the skills to build a rapport with our audience so that we are relatable. This is how we identify into which of the three categories they fall. Don’t, solely rely on your processes and forget your art. As Oscar Wild put it, “The play was a great success, but the audience was a disaster”.
Top tips – for getting paid
Can’t pay – Everybody can pay something! Find out what they can pay and agree an instalment plan. Direct debit, standing order or post-dated cheques are a good option. Make sure that you get the agreement in writing (letter, email etc).
Won’t pay – Some of your options are; (1) Charge interest on outstanding debt. (2) Send the debtor file to a collection agency, where their business may appear on a list of bad debtors. This can affect their credit rating. (3) Apply to the Court to have the business wound up. (4) Take Legal action.
Should not pay – Find out the root cause of the issue and address it immediately. I have seen companies hold huge payments because of some tiny queries. The longer you leave the issue unresolved the longer you will wait to be paid.
Know your Audience – Irrespective of the category of customer, keep the lines of communication open. Get all the facts, paperwork you need and do your homework. Find out as much information about the person or company as you can. Once you have identified which category of customer you are dealing with, then decide what action to take.
