DAL Collection Tips
- Know your customers individually ~ Once a customer's records begin to show irregular payments, it is advisable to keep that account under close scrutiny.
- Keep your records current ~ Changes in the market as well as management direction, can abruptly alter the course of a company's financial health and conduct. Keep abreast of the trade reports pertaining to specific companies so that you're always aware when changes occur.
- Tighten your collection procedures ~ When business conditions are uncertain, start by revising your collection letters, making them stronger and more action-oriented.
- Try to discourage extended payment terms ~ Screen requests for extended payment terms carefully and ask your sales department to discourage these requests so that they can be held to a reasonable minimum.
- Pursue partial payments with requests for the balance owed ~ The best practice is to acknowledge partial payments promptly and then follow-up with communication to accelerate payment of the remainder.
- Shorten your collection schedule ~ Cut the time lag after an account's due date by shortening the period from that date for continued extension of credit privileges. This practice can sometimes exert needed leverage on accounts, particularly those that rely heavily on the supplies or services your company provides.
- Keep your lines of communication open ~ But make sure you're getting through to the right person - the decision maker.
- Try to resolve disputed matters quickly ~ Insist that the undisputed portion be paid immediately, indicating that the balance will be negotiated.
- What to do when all else fails ~ Your judgment will tell you when you have exhausted all the means at your disposal to negotiate a satisfactory payment, while maintaining the account as a customer. At this point you can take positive action by referring the account to a professional Account Receivable Management company, such as DAL, who is Certified by the Commercial Collection Agencies of America.
Looking for more collection Tips? Check out DAL's Red Flag Warnings Snapshot.
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