7 ways to recover commercial debts without destroying your customer relationships

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Due to the instability of our modern economy, there are many of your customers who may have a harder time trying to pay back what they owe.

As with anything, there are various ways you can go about collecting debts, some better than others. In the following post, we will discuss some tips for more successful debt collections.

Make Sure You Keep Accurate Records

It’s crucial when you are discussing debt with a customer that you keep a complete record. Include everything said, as you may need to refer to this if there are disputes.

Carlo Pegna, a legal executive who owns Master Collections likens this to refereeing a football match.

“Players and fans expect games to be refereed in the same way your customers expect you to manage their accounts. There’s a much higher chance of reducing business debt owed to your business if you let them know promptly that their accounts are outstanding (yellow card). If you go straight in with a red card, things can descend into chaos and is when you will upset customers.”

As the case continues, keep the record updated regularly.

Don’t Assume

The first thing you should do when calling a customer is to ensure the debt is outstanding. They may have paid it back.

As they are currently or were a customer, they could be one in the future, so make sure you do all to keep those doors open.

It may be the debt was an error, so there is no need for it to be collected. Word things carefully and maintain a friendly tone. Listen to them and keep a detailed record.

Always Stay Prepared

Learn about the customer before making that initial call. Have copies of contracts, important information and invoices before you start.

Make sure you are familiar with the details so you can speak directly in a professional and knowledgeable manner with them.

Don’t Be Confrontational or Manipulative

Remember, there could be a legitimate reason they’ve not paid the debt yet.

You need to figure out if this is the case.

This is difficult, but it’s important to maintain a professional disposition when discussing the debt collection with the customer.

Even if they become aggressive or abusive, you need to remain calm and collected.

It’s also vital to reassure the debtor progress is being made by discussing the matter with you.

Use Self-Control and Remain Pleasant

You need to appreciate the effect the tone you use can have on the success of the initial conversation.

It could make all the difference to the situation if you take a non-confrontational and friendly approach, and you may find the customer is more willing to cooperate.

After establishing you are addressing the right person, try asking if you can help them. It could be they need extra information.

By taking the approach you are trying to understand and show you care about their situation, it can do a lot to stop the customer from becoming aggressive or defensive.

Communication is Key

Keep the lines of communication open. It could be the debtor is unable to pay back the money straight away.

Establishing a rapport with the debtor and showing you care and are trying to help him/her, may present a solution for them to begin repaying the debt quicker and sooner.

It’s true as time goes on, debt is harder to collect. However, people’s situations change and it may be possible for them to pay at a later date.

Always Offer Options to Help the Debtor

If you discover they are finding it difficult to pay back the debt in full, could they be able to make smaller payments over a longer period of time?

Figure out the best repayment plan for all. Remember, the end goal is to get the debt paid fully in shortest possible time. Continue to present options to them until you find the best.

Commercial debt collection can be stressful but following these tips will hopefully go some way towards alleviating that stress for you