As Collection calls progress and your receivables age, it can be difficult to remember that at the heart of your interaction with your debtor, lies the fact that you are, by definition, negotiating with them.
Though it can be a hard pill, especially when your company is clearly and rightfully owed the money, understanding that the process is one of negotiation can make achieving your desired outcome a much less stressful task.
Here are a few tips that can encourage constructive dialogue…
Give your debtor a voice. Giving your debtor time to talk can set the conversation off to a positive start and important information can be revealed that can be used to help settle the debt.
Listen. By hearing what your debtor is saying you are more likely to pick up subtleties that will help your collection.
Show that you are listening. By encouraging the debtor to go on through verbal cues such as ‘go on’ and ‘I hear you’, you might get deeper into the real reasons for resistance to payment. Debtors will often be defensive and some patience on your behalf might lead to meaningful facts being shared as to the real situation.
Make sure the debtor is finished talking before pursuing your agenda for the conversation. Breaking into the conversation with your questions or concerns can stop the flow of information and create resistance. The more information you can get, the more effective your side of the conversation will be.
Reserve your Judgment. Letting your debtor know that you are genuinely interested in his situation creates an environment that leads to goodwill. Most debtors know that they should pay their debt and your lack of criticism can encourage them to want to work with you. Sometimes the issue may be a miscommunication that needs to be rectified.
Start with an Ask, not Tell approach. Debtors generally understand that they will have to make payment arrangements. By asking how they believe the problem can be resolved you can get a good start on achieving a workable plan. Once they give their suggestions you have information that can help you to adapt their suggestions to fit your company’s needs more quickly.
Once you have your debtor on the phone, these suggestions can help create an environment where you are most likely to get the results your company needs.
Having trouble getting the conversation started?
That’s where Schel really shines…
Our 3rd party approach, early in the A/R process gets your debtors calling YOU, before the file ages too long and your debtor becomes more difficult to reach or even goes out of business.
Our system is often over 95% successful, with costs of less than 5% for ALL collections, including litigated files, when used as recommended.
Always feel free to contact me if you have questions regarding any aspect of your receivables- if I can’t help you, I’ll find someone who can.
Here’s to longer days and another month closer to springtime.
(thanks to hahastop.com for the awesome jpeg)