Maintaining a Relationship – Collections EtiquetteCollections Training Resource
February 5, 2013 — 1,815 views
Debt collectors are entrusted with the responsibility of collecting payments from the people who owe money to their company. It is often difficult for collections professionals to establish immediate contact with their customers or debtors. However, it remains their duty to get in touch with the debtors and to extract payments from them. While some means of debt collection are effective in the short run, they can be massive obstructions in the long term. It is important for debt collectors to observe collections etiquette in order to ensure that their customers make payments on time. Maintaining a healthy relationship with your debtors will ensure that there are no problems with regards to reaching them in the future.
Understanding Debt Collection Principles
Debt collections professionals must understand the true implications of debt before entering into the line of work. You must know why credit is given by companies and understand the debt and credit policies of the company you are working for. The financial results of your company can be significantly impacted due to outstanding debt, making debt collection a crucial activity for the business. As a debt collections professional, you must set realistic and definite debt collection targets after a thorough discussion with your upper management team. Time is the main factor in the debt collections business, so it is essential to make effective use of your time and know when a case may be pursued and when you must give up.
Make Calls and Make them Count
There is nothing quite like keeping your customers happy as well as getting what you want, both at the same time. Debt collections professionals play a vital role on behalf of the company. As far as the debtor is concerned, debt collectors represent their creditors. It is important that you communicate effectively and professionally with your customers so as to keep them from getting annoyed with the company.
An effective debt collection process will require good planning and preparation. When you’re given the task of collecting debt, make sure that you’re talking with the right person. Questions must be asked diligently, and threats and arguments must be avoided at all costs. Active listening is also very important when communicating with your customers. Summarize your expectations, clarify them, and confirm the same with the debtors. Since calls can go off-plan, learn ways in which you can amicably close conversations.
Management tools such as reports and checklists can help you better perform debt collection tasks, so use them effectively. Reminders must be sent if payment is due post the due date, but make sure that you don’t notify them too frequently as it may put them off.
Maintaining Common Etiquette
The relationship between a debtor and debt collectors is often a difficult one. Collections etiquette has the potential to determine the likability of a company. As a debt collections professional, you must be assertive towards your clients, and not aggressive. Your attitude when collecting payments must be friendly. If a debtor cannot make payments before the agreed date, identify ways to motivate him so that his outstanding debts are paid quickly. Each debtor may pose a potential risk to your company. Analyze these risks and classify your debtors in order to get through the debt collections process effectively.