Debt collection is an important part of every successful business. If you’ve been in business long enough, and have served enough customers, you’ll inevitably run into a client that has issues with making payments. The first time that happens, it can be extremely frustrating and uncomfortable. However, there are ways to increase the likelihood that you succeed on getting paid what you’re owed. Here’s our advice on how to collect on debt!
How to Collect on Debt
Preparation is Key
Before you call your client, take a moment to prepare for the conversation. You’ll need to have all of the information about the client, their payment record, and their relationship with your business in front of you to accurately discuss their debt… and to come up with a plan to collect on it. If this is their first time slipping on payment, or if they’re an important account, you should definitely factor that into your tactics when discussing the unresolved debt.
Having all the info on hand also allows you to dismiss any invalid excuses with facts – which is key to collecting. More on that below!
Control The Conversation
One of the most often exploited tactics from clients or customers that are trying to avoid payment will be to change the topic. Don’t allow them to – you must be in control of the conversation.
You don’t need to cut them off or disregard valid complaints. And you don’t need to be rude… but you must be firm and assertive. A simple “We can discuss that at another time, because this call is about resolving your outstanding balance only” can do wonders to ensure that the conversation stays on topic.
Stay calm, stay focused, and remember why you called: to collect what you’re owed.
Bend But Don’t Break
It often pays to be understanding and compassionate towards the client’s situation. A little grace goes a long way towards getting what you’re owed. Maybe your client can’t pay the sum in full today but is willing to go on a payment program if you’d allow it. In the business world, often times when they say they will pay you next month – they do.
You need to also be cognizant of your professional reputation and client relationships when handling situations like this.
However… if you do allow them flexibility, you’ll want to get a commitment from them on the terms (more on that below) while also adding consequences if they violate said terms. You’ll also want to make sure they understand that there are no third chances.
Get a Commitment
Each collection call you make should end with a commitment towards repayment from the client. Preferably, that commitment would be monetary… but it could also be on the payment timeline itself.
Simply having them agree to call in with payment info by a specific date will create a commitment on their part. It also allows you to have further leverage in the next conversation – and a stronger case if it goes to a debt collection agency.
Don’t hang up the phone without a commitment on their part to get you the money you’re owed.
Seek Professional Help (That’s the Team at Gilliam & Mikula)
If you’ve tried all of the above and haven’t had any success yet, it’s time to call in the professionals. Your time is worth money – and if you’re spending it all on debt collection, you might not be breaking even. That’s where we come in!
At Gilliam & Mikula, we specialize in debt collection for businesses throughout Virginia. We are armed with years of experience and as attorneys, have the backing of the law… and when you hand off a delinquent account to us, you can get back to work. – we’ll take care of collecting your debt.
Begin the process by filling out the form below!
Gilliam & Mikula is centrally located in Richmond, Virginia, and serves clients throughout the Commonwealth of Virginia. Our attorneys have over forty years of combined experience in various practice areas, representing individuals and businesses. We are licensed to practice in all General District Courts and Circuit Courts of the Commonwealth of Virginia including Central, Tidewater, and Northern Virginia areas.
The attorneys at Gilliam & Mikula are here to smoothly guide you through the “legal maze” and ensure that you achieve the most favorable outcome.
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.