By Richard B. Lederer

As business owners, we sometimes find it hard to collect money that’s owed to us. We may find asking uncomfortable and so we postpone. As with most disliked tasks, the more we delay, the more reluctant we become to tackle the chore. Stress builds; cash flow slows.

Meanwhile, something else is happening...there’s another dynamic at work. The longer we delay, the more likely it is that our debtor forgets all about the debt. That’s right…the longer we allow someone to keep what is ours, the more likely he is to forget that it ever was ours!

Time is the natural enemy of the collection process. It is extremely important for you to keep your receivables current. If an invoice is due in 30 days, the debtor should be called on the 30th day…no dawdling. Once delayed, the customer/client will begin to think you’re the type who will let the debt slip by…and this is a reputation you absolutely do not want!

Here are five collection etiquette tips that will enable you to get paid faster, prevent bad debts, and maintain goodwill:

1. Be prepared: Review the paperwork on the customer before making the call. Know the history of the account, credit record, and promises kept and/or broken. Have all records in front of you. Know who to call and speak directly to that person.

2. Be professional: Adopt a straightforward, business-like attitude. You delivered goods or services...you have the right to get paid. Stay cool…don’t curse (not even under your breath!)...and don’t threaten…legal action is your ace in the hole.

3. Be in control: Call on a regular basis (once a week at a minimum). Control the conversation…keep it focused on the debt and the repayment schedule. Do not let the customer sidetrack you with chitchat or excuses…(Check your records--- you’ll see that Uncle Mel died last month, too!) The objective is to collect your money, not make a new friend.

   
   

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4. Be flexible: Be ready to adjust to the client’s unique circumstances. Consider creative payment schedules. Remember you want to collect and keep the client.

5. Be firm: Every contact should end with a commitment to payment of a specific amount, by a specific date. Consider adopting phone check software so they can’t pull the ol’ "check’s in the mail" routine.

In addition, I recommend that you keep detailed, accurate notes of all contacts. They will yield a profile of the customer’s payment history, an invaluable tool for future dealings.

When you are prepared, professional, in control, flexible, and firm, you will have the confidence and the skills to get paid! So make that call you’ve been avoiding today!

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This article has been provided by Richard Lederer President of R.B. Lederer & Associates, Inc., credit and collection consultants. Mr. Lederer has been providing technology and training solutions to businesses of all sizes for over 25 years. For a custom-tailored collection program, contact Richard at (516) 682-5272. For additional information about the National Network of Accountant’s Preferred Provider Network go to www.nnaplan.com [4] on the internet or call Bruce Libman at (516) 677-6218.