Herzlich writes the Small Business column in Newsday.
Making collection calls is never easy, but it's a necessary task if you want to get paid.
While some calls go smoothly, often there's pushback from the debtor.
Anticipating excuses and being prepared to offer solutions can help facilitate the payment process.
"It's your job to offer a solution," says Michelle Dunn, a Plymouth, New Hampshire, collections expert and author of "Telephone Collection Call Scripts & How to Respond to Excuses" (Never Dunn Publishing LLC; $18.95).
Ideally, you'd offer two solutions and let the customers choose which suits them best, she notes. "If they get to choose how to pay, they're more likely to pay," Dunn says, noting that oftentimes business owners wait too long to follow up on past-due debt.
Being more proactive could reduce the number of collections calls they make, she says.
Don't delay. For instance, if payment terms are Net 30 (full payment due within 30 days), you might make a "customer service" call on the 27th or 28th day for new customers or those with a late payment history, she notes. The call would be to check in to see if they were happy with the product, got the invoice, etc., she explains.
Follow guidelines. If you're collecting from a consumer, make sure you follow the guidelines in the Fair Debt Collection Practices Act, Dunn says. The guidelines don't apply to business debts.
Under the act, it's improper to disclose a debt to a third party, says Don Hochler, a Woodbury-based commercial litigation and collection attorney.
For example, if the debtor's spouse or parent answers the phone, you can't address payment with them, he explains.
You can leave your name and number but can't say the reason for the call, he says. If they ask, you can say, "It's of a personal nature," says Hochler, who recommends someone besides the business owner make the call. There should be a layer between the owner and customer, such as an office manager, he says.
The first call should be "very polite," says Dean Kaplan, president of The Kaplan Group, a San Luis Obispo, California, commercial collection agency.
Be prepared. Have key information handy, including the invoice number, amount owed and communication history, Kaplan notes.
In the first call, the debtor may say the invoice was lost. If so, resend. But if the person makes excuses, try getting a new date and a commitment of what will happen on that date, Kaplan says.
"We always document any sort of an agreement, typically in an email," he says. Then follow up on that email, so if payment's promised on April 8, on April 6 send a reminder email, he says.
The debtor may give you a barrage of excuses, like "the check's in the mail," says Richard Klein, president of RHK Recovery Group, a Plainview-based receivables management and debt collection agency.
In that case, you can say, "I never got it" and offer the option of your salesperson passing by and picking it up, he suggests. You could also ask for a check number over the phone, he notes.
Face-to-face contact. If you're not getting anywhere over the phone, you can always send your salesperson out for a visit, Klein says, noting that's generally the person who has the relationship with the customer.
If the customer becomes abusive, don't follow suit.
"Even if they turn up the heat, you're always professional," Hochler says.
Pressure. If after repeated attempts you're getting nowhere, let the debtor know you may have to take another course of action (hiring a collection agency or an attorney), says Dunn.
Just don't sit idle.
"Once an invoice is past due, the chance of collection goes down over 1 percent per week," Kaplan says.