One of the most effective collection strategies is to have a robust credit check and onboarding process in place. Ensuring that you do a thorough credit assessment and onboarding while offering goods or services on credit is one of the best strategies to adopt.
What are the 3 key strategies when it comes to collections?
Communication, choice, and control. According to a 2018 Benchmark Study released by Intelligent Contacts and conducted by Marketing Research Firm AYTM, consumers carrying balances and the lenders who are owed, all want the same thing – to pay it off.
What are the strategies of speeding up collections?
Some companies have sped up collections simply by changing their billing cycle from twice-a-month to once-a-week. Another idea is to invoice early in the month. Many companies do a once-a-month check run and, if your invoice happens to miss their monthly run, you'll have to wait another 30 days to get paid.
Call businesses that have job postings for credit managers or accounts receivable positions. According to StartingaBiz.com, these types of companies may consider hiring you for their debt collection needs. Look at free online job boards for contract or freelance collection agency jobs as well.
Communication is one of the keys to becoming a successful debt collector. When you are able to effectively communicate the debt collection message to your clients, you put yourselves in a position to resolve differences while you build a trust relationship between you and them.
The most common way to collect primary data is through surveys and interviews. Surveying is the process of collecting data through a questionnaire that asks a range of individuals the same questions related to their characteristics, attributes, how they live or their opinions.
Although debt collectors may use scare tactics in an attempt to make you pay your debt, their scare tactics are not always legal. Always refer to the FDCPA and report a debt collector using unfair scare tactics to retrieve your debt.
Start by offering cents on every dollar you owe, say around 20 to 25 cents, then 50 cents on every dollar, then 75. The debt collector may still demand to collect the full amount that you owe, but in some cases they may also be willing to take a slightly lower amount that you propose.
According to the FDCPA, a debt collector cannot call a debtor more than once per day for each debt. This means that if you only have one outstanding debt, then your debt collector is only allowed to call you one time per day.
What is a good average days to collect receivables?
A shorter average collection period (60 days or less) is generally preferable and means a business has higher liquidity. Average collection period is also used to calculate another liquidity measure, the receivables turnover ratio.
