Payment past due is a phrase to make any CEO unhappy — more so when your firm is giving the warning. Here’s a quick guide to getting payment without burning bridges.
Act sooner, not later. “The longer you leave it, the more difficult it will be to collect your money,” says Maggie Heaton, assistant manager of Vanguard Collection Agencies in Edmonton. If your terms are 30 days, for instance, take action at 40 days.
Write, then call. The pros start by sending out a written notice. If you don’t get a response within a week, follow up with regular phone calls — daily, if necessary.
Persist politely. Never lose your cool during those regular phone calls. “Honey works better than vinegar,” reminds John Canal, president of Action Collections & Receivables Management in Toronto.
Never harass. Phone during business hours; if you take liberties like calling debtors at home at three in the morning, you could be charged with harassment.
Take small bites. When you suspect a customer can’t afford to pay immediately, negotiate a structured repayment plan. (When the debtor balks at your offer, it’s a good sign they’re not going to pay at all.)
Hire help. When you’ve reached your wit’s end, you can enlist a collection agency to work on your behalf. You’ll pay 20% to 50% of the amount collected, and only if the agency retrieves the dough.
© 2003 Deena Waisberg
