3 Helpful Tips for Commercial Debt Collection Success
Categorised in: Our Blog
One of the more unpleasant – and difficult – challenges busy Credit professionals face is what to do when a current (or more often, former) customer violates the payment terms of the company.
Another challenge facing Credit professionals in today’s marketplace is finding a trusted, professional and experienced partner to utilize in collecting this type of debt.
What follows are three of the biggest strategies Credit professionals should employ when looking to partner with a Commercial debt collection agency.
There are many different types of debt that you might need to collect from current – or more often, former – customers. But regardless of what type of debt recovery needs to occur, the key is in the process itself.
Below are three of the most important tips Credit professionals will want to adhere to when engaging an outside, third party debt collection agency for assistance.
TIP 1 – Choose the RIGHT Collectors!
It should come as no surprise that not all debt collection agency professionals are created equal. And when choosing a debt collection agency to partner with, the most important consideration you should have in mind is the QUALITY of its collection professionals.
The collection of Commercial debt is a unique, delicate and often difficult process. Very few collection agencies specialize in this type of debt recovery, so it’s important to ask if its actual collectors on the floor have any specific experience or expertise contacting either mid-level or high-end executives, along with executing an effective collection strategy.
(Note: One of the fastest ways to determine this is to ask for social proof – client testimonials, references and/or names of other companies this agency has collected similar debt on behalf of, and what the results were.)
Either way, what you should be looking for is an agency whose collectors can mirror an executive type – meaning these collectors understand the personalities, emotions, egos and other factors that come into play with this type of nuanced, delicate debt recovery.
Unless a collector has spent hundreds of hours talking with gate-keepers and executives and discovering the best way to resolve these types of disputes, it is difficult to achieve an outcome everyone is satisfied with.
We cannot emphasize Tip 1 enough. It is CRITICAL you choose a collection agency partner whose day-to-day debt collection professionals understand the psychology, temperaments, egos, leverage points, emotions and workplace cultures associated with this type of recovery transaction.
TIP 2 – Industry Experience = Outstanding Results
Building from Tip 1, it’s also important that a debt collection agency partner understands the ENTIRE Commercial transaction process from start to finish.
Understanding the life cycle of Commercial transactions will prove critical in providing your collection agency partner with the knowledge, leverage and negotiating power it needs to resolve disputes quickly.
A good collection agency will already be well-versed in the type of business-to-business disputes and repayment difficulties that occur in today’s business environment.
If you find yourself having to do a lot of explaining and “educating” right up front, that should be a red flag.
TIP 3 – What does a collection agency’s approach actually look like?
This is a critical distinction – how will your collection agency partner actually attempt to collect your past due receivables? How will it handle unhappy and unfriendly former customers? What if those customers react poorly to receiving a call related to their debt and immediately put up a defensive wall as a result? How does a debt collector overcome those common objections and challenges without escalating the situation any further?
All of these are important questions that must be considered BEFORE you agree to partner with a collection agency.
For example, many successful Commercial debt recovery calls follow a similar pattern. A dunning notice or letter is sent out, followed by attempts to make direct contact with the debtor.
But before that initial telephone contact is made, a quality collection agency partner will have already done quite a bit of homework.
For example, who is the principal? What assets do they have? Is the company solvent? Does the debtor have other debts with which they will be contending?
This “pre-call” homework can be critical in building the type of instant trust, candor and credibility needed to successfully recover debt.
When a debtor realizes that the person on the other end of the line has done his or her homework, is acting professionally, ethically and with empathy, it moves the process toward a successful (and less volatile) outcome much more quickly.
Equally important is finding a debt collection agency partner that understands the importance of listening when it comes to collecting debts related to Commercial transactions. If a collector does a lot of listening, and allows the debtor to tell his or her side of the story, it helps diffuse any tension and defensiveness the call might have began with. Once the debtor is done talking, the collector can then bring the conversation full circle, moving both parties toward a financial resolution everyone can live with.
A great collection agency trains its staff to listen, understand and empathize with debtors before making an attempt to collect.
As a busy Credit executive or professional, the last thing you need cluttering up your desk or daily duties is worrying about bad debt.
And while it makes great sense to outsource this task to the experts, it is extremely important to choose wisely when selecting a collection agency to partner with. As the tips above indicate, this type of debt collection is best done by an agency with experience, expertise and an empathy-based approach.
About Summit A•R
WHAT WE DO: We’ve spent the past two decades perfecting a process that enables us to recover Commercial debt for our clients in a fast, efficient and professional manner.
WHY IT WORKS: For more than 20 years we’ve helped Credit Directors and Credit professionals at some of the largest companies in the country navigate the difficult and oftentimes delicate situations that arise when bad debt arises.
As a result, we understand the executive-level type of debtor like few other collection agencies can. Commercial debt situations are not your “typical” type of debt collection – and that’s why Summit A•R is not your “typical” collection agency.
THE OUTCOME: We typically recover anywhere from 35 to 70 percent on an individual client account depending on a variety of factors. Every situation is unique, and we work closely with our clients to achieve the highest possible return while utilizing the empathy-based, professional debt collection style Summit A•R is known for.
WHO WE ARE: Based in Minneapolis, Minnesota, we eschew the common “churn and burn” approach you see with far too many collection agencies. Instead, our office is filled with experienced, professional debt collection experts with 10-plus years of experience collecting Commercial debt.
BOTTOM LINE: Our sophisticated collection strategy, high-end skip tracing software and client-first approach ensures you get your cash back faster while also protecting or even enhancing the relationship between your business entity and the individuals who owe you money.
READY TO TALK? Connect with us online at www.summitcollects.com or call us at (888)222-0793.