Collecting Past Due Accounts - Demand the Balance in Full
by Jim Finucan
Published on this site: July 20th, 2005 - See
more articles from this month...
A collection call, in itself, is a demand for the balance
to be paid in full. That's your goal every time you pick up
the phone to call a debtor. It's easy to get complacent, though,
and that can take the edge off your technique. If you're not
careful you can find yourself dunning for only a partial payment.
The word "payment (as in "partial") shouldn't
leave your lips until it has become obvious that you have
no other option but to give up on the idea of getting the
full amount. Up to then you must sincerely believe that the
full balance is obtainable. If you don't come across with
that kind of certainty the debtor will sense it and try to
exploit that weakness. You must convey - clearly yet tactfully
- that the debtor has to find the money to satisfy the bill
and he most do so now. Today. If he needs a reason give him
one - or two, or even three:
"There's an audit with my supervisor on your account.
If he sees that this balance isn't paid in full there will
be an immediate recommendation for legal action. But we're
OK because you have a week to get the loan you need."
Or,
"This delinquent balance is going to be reported and
will go on your credit file on Friday (give the debtor a specific
day) so if we're going to prevent that from damaging your
credit for the next seven years we have to find the money
now."
(debtor) "What do you mean?
"I mean that once this gets reported to the credit bureau
it can't be removed. If you later pay the amount in full it
will still show as having been delinquent and that will be
a red flag for anyone who checks your file in the years to
come. You still have the opportunity to prevent this; please
don't let it get away. Do yourself a favor."
Or,
"If the loan can't be approved for the entire amount
I may be able to get you a settlement. By that I mean I might
get my client (or your boss) to accept a little less. (Make
it sound as though you may be able to get the debtor a "deal.")
But your bank has to call me and confirm that you have applied
for the loan."
Put the debtor in a tough spot and then offer him the answer
to his problem. Once you are able to raise concern in the
debtor show him how he can pay the bill using the assets he
has.
The moment the debtor realizes that time payments are not
an option you have gained ground. Be consistent. Don't digress.
Don't allow any wasted words or casual conversation. Stick
with your ultimate goal: getting the balance in full.
Jim Finucan knows all about the dances, dodges and
delays debtors will try to pull. Let Jim show you how to double
or even triple the money you collect from your accounts receivable.
Check out his unique collections manual "Past Due."
For more information visit: http://www.tiare.com/pastdue.htm
|
