Even for accounts receivable management professionals, picking up the phone and calling someone to ask about money can be uncomfortable, especially if you are not properly prepared. Beyond feeling awkward, if you are not prepared your conversation can be a waste of time, detrimental to the relationship, and potentially harmful to the entire accounts receivable management process.
Here are a few ways you can prepare yourself for your next round of accounts receivable management calls to help you remain in control, keep your customers relationships positive, and make your credit collection calls more effective and successful than ever.
Always have important information in front of you.
This will help you keep the conversation moving forward and keep you in control of the situation. The most important information to have in front of you is the exact amount owed to you, payment agreement, due dates, all invoices even if they are not past due, and a list of past promises. With that information you should be ready to handle any questions or comments they throw your way. If you ever find yourself saying, in response to a question, “I will have to look into that and get back to you,” have basically given them a verbal extension without meaning to and given them the impression you are not in control. Those are both things that can negatively impact the process and your reputation in the eyes of the customer.
Be prepared for excuses.
Your customers do intend on paying you, but sometimes excuses are made to avoid the consequences of late payments, How many times have you heard, “the check is in the mail.” When you ask a customer about their payment? That is an extremely common excuse-are you prepared to answer it? Having the right response can make the difference so compile a list of the most common excuses you hear and think of an effective response for each one. That way you will know what to say to help your cause rather than hurt it.
Be firm, not mean.
There is a fine line between the two, but it is important to let your customer know you mean business without being mean about it. Use the pitch, tone, and inflection in your voice to help you. You can still have a polite conversation about the Holidays or the kids, whatever the case may be, to continue a healthy and positive relationship with your customers, but when it comes down to business be sure they know you are serious. This doesn’t mean yell or get an attitude, just be very clear about what it is you need from them. It may sound silly, but record yourself doing some mock (or real) calls and listen to them for places where you can improve. This will help you hone your skills, improve your responses, hear your tone, and help you improve other skills that will make your calls more effective.
End the conversation with a plan.
Never hang up the phone without first summarizing the conversation in which you cover everything you spoke about (taking notes during the conversation helps) this summary should include:
- Amount owed
- Date it is due
- Your expectations
- Their promises
- Consequences of not meeting deadline
- Urgency of this matter
- Follow up plans
If your customer misses the next deadline be sure to follow through with any of the consequences you had discusses so they know you are not taking this lightly and be sure to follow up with them immediately.
If you take the time to prepare for your call and follow the above strategies we are confident that you will see a change in the level of success you have with your collections calls. What other tactics have you found to be helpful in your Accounts Receivable Management efforts?