The Collection Call

A Debt Collection DIY Primer

The telephone enables a credit manager to make many contacts in the shortest period of time. A call permits you to present your case to the debtor for immediate response.  During the conversation you can determine whether the claim will be paid in full and when. This is the time to determine reasons for nonpayment.

Advantages in telephoning are the two-way line of communication and the speed in obtaining a response. For most calls, follow a set pattern:

  • Call directly to the person in charge.
  • Identify yourself and your company.
  • Ask for payment in full at a specific date.
  • Suggest a solution once you have determined the real reason for the bill not being paid.

Main Reasons for Nonpayment of a commercial debt

The most difficult part of a call is to determine the real reason the bill has not been paid. There are usually three reasons for nonpayment.

  1. Lack of funds or belief that there is a lack of funds.  Most non payments result from real or imagined lack of  funds. You have to determine which of the two is truly the case. Frequently, businesses have assets they don’t recognize.  Sometimes, they may be short of funds because too much is tied up in accounts receivable. You can point this out to them and suggest ways in which they can release some of their capital and keep their accounts receivable more in line.
  2. Dispute. Disputes can be discussed to determine whether or not they are valid. The valid claim must be adjusted quickly and fairly. The nonvalid claim should be
    exposed and immediate payment should be requested.
  3. Refusal to pay. If it is a refusal to pay, your next step has been dictated by the customer/debtor. You must take third-party steps to enforce payment.  Pin down the arrangements agreed upon. Make sure your customer puts them down in writing while you wait.  Remember, your customers have past due obligations to
    other creditors, and you are competing for their money.  Be  sure they do not send your money to some other creditor.

Follow up with a notice reminder or form letter.



This series of articles come from a fantastic publication publishedby the IACC  (International Association of Credit Collectors).   It is well grounded and fundamental advise that should be ready by any professional involved in credit collections.

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