Companies frustrated with their clients because they have not paid their debts often worry about coming off too strong if they continually ask for payment. The Credit Research Foundation has established an effective follow-up strategy to help organizations contact customers and obtain collections.
According to the CRF, businesses should contact their clients who promised to send a check on a particular date if the payment does not arrive. If companies fail to do this step, their customers may feel like they hold the cards in this situation.
For organizations that have structured a payment process over time, the length between payments should be as short as possible. The CRF encouraged companies to ensure all payout plans are documented and signed.
"Send two copies of your confirming letter to the customer along with a prepaid addressed envelope," the CRF said. "Ask them to sign a copy of the letter, acknowledging that they understand and agree to your plan, and return it to you. In any confirming letter, you should state that if the customer does not adhere to the agreement, the entire amount is immediately payable in full."
The organization concluded that businesses should keep several points in mind when going through the collections process. These include being ready to stop shipment if client checks are not received or payment has not been agreed upon and ensuring the legal department reviews all legal agreements beforehand.
Collecting debts can be a stressful process, but there are ways for companies to boost their operations. For example, experts have praised collections software because it enables businesses to streamline their collections procedures and track their client accounts much easier than tedious manual methods.