Turning your debtor-dues into cash is the primary goal of your collections team. It is the imperative that maintains the business viability; get the cash that we are owed. The reality of course is some debtors are more reliable than others when it comes to settling their accounts. Some clients have payment KPIs or legislation that drives them to pay within terms. You have to love those ones! Some are good all-round corporate citizens and pay their dues on or near time. Some clients need gentle encouragement now and then and the very occasional slap on the wrist. Some are tardy with their payment obligations and need regular focus and attention. Some clients are just plain rude, deliberately delay and use your credit to actively fund their own business. Over time, plenty of clients will slide up and down this barometer of professionalism due to the operational situations they are faced with.

So how do you get paid as consistently as possible? How can you be at the top of the list for payment decisions? How can you be the one they choose to pay rather than delay? How can you avoid all but the most extreme accounts stretching way out past due?

To change your clients’ behaviour you need to be determined, predictable and defensible in yours. When correspondence is entered into it needs to be accurately recorded and always to hand. When accounts slip past due, reminder letters need to be sent. When statements are requested they need to be turned around immediately. When promises are made they need to be called to account. When payment behaviour deteriorates, escalating levels of tone and consequence need to be engaged. In effect, the squeaky collector has a much greater chance of getting the cash than a sporadic, disorganised and unprofessional one.

A proven collections strategy is to segment your clients into categories of payment behaviour and then treat each category in accordance with their needs. Perhaps good payers only need a gentle reminder letter if their dues slip a little past terms. Whereas the erratic payers need their first reminder letter just before terms and ever stronger worded versions the week and the fortnight afterwards.

This sort of personalised collections strategy is hard work and it needs focus and determination to implement and execute. Without technology you need many hands in the collections team and each collector is limited to the number of accounts they can effectively handle. Inconsistency in collections activity can lead to sporadic payments, unmanaged debtor days and spiralling day’s sales outstanding.

Adopting a specialised collections tool means things get much easier. Generation of escalating reminder letters by payment category can be automated. Statements can be generated and dispatched in real time while on the phone. Promises can be recorded and scheduled for follow up accordingly. Broken promises can easily be identified and called to account. Every communication and correspondence can be recorded and be on hand for reference during phone calls. Full collections behaviour and activity audits can be issued for bad debt assessment and handed over to legals. Using a properly integrated and fit-for-purpose collections tool allows a collector to effectively and efficiently manage factors more of accounts than any manual process.

Click here to see how your DynamicsGP or Infor SunSystems based collections team can become the squeakiest they can be.

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