Supposedly first quoted by Benjamin Franklin, the phrase, ‘Time is money’, holds exceptionally true in the case of debt recovery. For, time management is often considered a crucial part of collecting overdue payments.
Considering how the collectability of a debtor keeps decreasing the longer the account is left as outstanding, the process of debt recovery becomes a time-sensitive task. From initial reminders to collection calls, it is essential to ensure that each action carried out follows the time frame associated with the task.
For instance, the objective of debt recovery is to obtain the outstanding payment within the due date. In order to facilitate this, the customer dunning process has to begin way before this set date. Similarly, an accurate and timely method has to be followed while sending reminders to debtors. If you specify a period of three days to receive the payment confirmation, it is imperative that you call the customer right after the three days. This also helps in communicating that you are prompt and serious about following up.
Time management is one of the key skills a debt collector or professional needs to develop before he begins with the procedure. Understanding that time is of essence should encourage you to take a proactive approach towards the process. Staying at the same stage of collection for months will only end up detrimental to your business.
Lax measures and lack of commitment will only lead to further defaulting on the debtor’s part. Being overly flexible gives customers the impression that late payment is not as serious an issue while well-timed raises and professional communication encourages them to pay bills as per the due date.
Deciding on a progression for your collection process is another major aspect involved. Gentle notices before due date to progressively stern reminders help communicate the seriousness of the situation before you move onto formal notices or legal measures.
Using time effectively to recover outstanding amounts not only highlights the business’ credibility but also helps build a healthy bond with the customers, in the long run.