Do your customers owe you money?

When you provide a service/product to a customer, you obviously expect to get paid. What happens when you don’t? What happens when you get the run around or no response back? How long can you let go, when do you say enough is enough and what can businesses do? Interview by Zeeshan Pasha from Nifnex.

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Candice Olivier

 

We spoke with Candice Olivier from Professional Collection Services, a dynamic young professional with many years of experience in the field. We asked her some curly questions which she handled very well and she also shares her insight and tips below on how businesses can better manage their invoicing/accounts receivables and how to make that debt collection phone call. Also, you must read what Candice suggests to keep your mind and body positive!! Bet you haven’t hear that before.

Candice, welcome and thank you for your time.

 

Debt Collection …. Your business can be a saviour to some and absolute nightmare for the others. Do you agree/disagree?

[Chuckles] I suppose you can say that. Of course our clients are appreciative of a good result and our debtors might see us as a nightmare however they are aware of the debt and would be aware of the cost when they requested the service or goods.

The rage is usually caused from stress not being able to pay the account so discussing with our client we are aware if they are willing to accept an instalment to achieve a result.

So, what is the time frame when an overdue bill becomes a debt to be recovered?

An account or invoice that is overdue will depend on your business or company payment terms. Once the invoice has been supplied and the timeframe expired we recommend that you make following-up a priority to ensure payment is received. The longer you leave the matter – the harder is to recover. We ideally recommend a debt should be passed over before 90 days. You have 6 years from the last date of payment towards the invoice or admission to the debt in writing before it becomes statute barred.

Some businesses get their admin/reception staff to make the initial overdue bill phone calls. What should they be saying over the phone?professional colection services ad

A business should always train the person in that position to overcome customer’s objections, take ownership of problem solving and who to escalate the call to the next person in the procedure.

The first thing is to ensure you have the particulars of the invoice(s) and facts/concerns on any dispute.

Be positive on the phone as people can read your body language and tone can either make or break your call – always be polite.

Be assertive and ready to respond to achieve a result or commitment.

The last thing I would suggest is know when and what method you will be receiving payment. If your customers stated they paid via EFT ask for a copy of the remittance, if they have posted a cheque (oh yes I’m sure we have all heard that one – the cheque is in the mail!)  Ask what date it was sent and get the cheque number.

‘Debt Collectors’ the term & profession can be scary! Does it ruin a business relationship with a client when a Debt Collector is involved?

Unfortunately it’s a profession that carries quite an unsettling stigma. Many people are conscience about how it will affect the business relationship however the majority of clients are not concerned about this because they have exhausted their internal resources, time and energy and have not achieve payment – What I explain to my potential clients is that you have to think about it as an internal process in place then you are only following procedure.

We explain in our first call the reason it has been outsourced to a debt collection firm and it isn’t because they paid the invoice it’s because they haven’t honored their side of the transaction.

The customer has a responsibility to communicate whether they cannot afford to pay or have a dispute and if they fail to do so then you need to ensure you are not going to be out of pocket!

Professional Collection Services doesn’t just handle debt collection – what else can you assist with?

We pride ourselves on being able to assist with all your debt management questions and requirements. This may even include reviewing your credit applications / terms and conditions / company checks for new or potential clients as well as the below:

A lot of your clients get you involved before the matter gets serious by getting you to represent the business from a softer angle. What benefits has it had for your clients?

Yes, especially for a small business who doesn’t have a need for a full time accounts position. These businesses are usually a small team and need to have a very quick turnaround. We also find that a lot of book keepers don’t feel comfortable making debt collection calls.

We act on matters as they become overdue to do the follow ups. We use a soft approach to eliminate negative publicity and the benefit for the client is that they have had more time to develop their businesses.

Debt Collection is an art. What makes a good internal approach when calling a customer who has an overdue bill?

A good internal approach is use the same call to build the rapport with the customer and get to them to understand how your company works.

Negotiation can play a huge part – For example, what I have always found to achieve results is if the customer is unable to pay, request a lump sum by the end of the day and then offer an instalment over 4-6 weeks maximum and let them know in a respectful tone that if they are buying from you again or requesting your services and they cannot afford to pay within the invoice terms can they advise you prior so that you can work out a deal.

This way you are still inviting them to do business with you but there is further clarity for cash flow.

Record keeping software such as MYOB or ZERO can flag an overdue account. Do you recommend an internal automated process by using technology we have at hand?

We have recently introduced IODM (www.iodm.com.au) which is an online debt management application that automates the entire AR cycle, helping companies monitor and collect receivables and improve cash flow.

The system is in the cloud and interfaces with systems such as Xero, MYOB and soon to interface with Quickbooks and other popular accounting packages.

The system basically generates 2 reminder letters, followed by 2 debt collection letters all wrapped up with an SMS reminder at each stage. If the debt still remains unpaid, you have the ability to refer the matter to a debt collection company for further action.

Candice, how you stay positive and relax your mind during the day?

Working in this industry can be draining especially emotionally with the frequent colorful conversations as I call them however I actually find it quite easy to stay positive. I work each day like it’s my own business and each situation is different and that keeps you on your toes.

Also, I believe when you have a 10 minute break or your lunch break that you move away from your desk and into the sunshine or get some fresh air. My colleagues and I will usually once a day break into a 5 minute regime of star jumps to get the body moving around and adrenaline pumping.  (It works!)

Wow Star jumping… Haven’t heard that one before! Love it!!

What are your tips to businesses who have done everything they can and failed chasing the monies owing from a person or business whether they have a formal signed document or not?

It’s very important to have an internal credit process in place so that there is always motion to resolve these types of matters as soon as they lie stagnate or get lost in a pile of paperwork on someone’s desk the less chance you have of recovery.

We say strike whilst the iron is hot. If your have an accounts team, educate them on a process and timeframe for example if you invoice on 30 days and they have not been able to get payment by 45 days then it should be pursued by a manager, business development manager or even the director. If after a reasonable time they have not been able to resolve the matter then contact a debt collection firm. The signed document part is very important – ensure that your company has a cost recovery clause in your terms or credit application that indemnifies you for any out of pocket fees, this way all debt collection fees can be added the invoice.

 

About Professional Collection Services:

Professional Collection Services (‘PCS’) was established as a debt collection agency in 1996 by current directors Harold Neal, Brett Braithwaite and Stephen Braithwaite.

Now, after eighteen years of operating as a debt collection agency, PCS boast offices in all capital cities on the Australian eastern seaboard, as well as Ballarat and Townsville. The key to the success of PCS has been its focus on delivering a personable and affordable debt collection service. Unlike some debt collectors, PCS caters to all levels of outstanding debt and covers a broad range of clientele, from individuals to major corporations. This flexibility is supported by a wealth of experience as debt collectors that continue to deliver a high quality efficient service. PCS values your client relationships and endeavours to make every debt collection as positive as possible. Through PCS’s time honoured systems and highly trained professional staff, the burden of debt collection is eliminated.

Professional Collection Services | 45 Ventnor Avenue, West Perth, 6005

P: 0418 882 697| F: 07 3831 5655 | E: colivier@profcoll.com.au | www.profcoll.com.au

Professional Collection Services

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