Tips to Help You Improve Your Debt Recovery
Most businesses operate by selling their products and services in cash, on credit, or through a combination of both. Where credit sales are involved, not all debtors pay their loans according to the credit terms. A fraction of the debtors is likely not to pay while others would pay long after the debt is overdue.
It’s, therefore, imperative that you come up with a strategy that will accelerate the debt recovery process. Working with a debt collection agency is one of the most effective ways of pursuing your debtors. Even though you’d need to pay the agency for their services, it’s an effective way of dealing with debtors who’re not honouring their purchase agreements. By working with a debt recovery agency, you get all the time to focus on what you do best even as the agency follows up on your debtors.
Either way, it’s proper that you get essential tips to help you in the debt recovery service. Below are a few of these tips.
1. Keep Proper Records
For you to have a successful debt recovery process, you must have proper and accurate records. That’s true even when working with a debt collection agency. With the correct and up-to-date information, it’s easier to follow up with the debtors and remind them of their obligations.
2. Remain Professional in Your Dealings
At whatever stage of a debt recovery process, never let yourself be carried away by emotions to the extent that you make reckless statements or issue unwarranted threats to the debtor. It’s the fear of handling some customers unprofessionally that pushes some businesses to hire debt recovery agencies, understanding that most of these agencies have been in the business long enough to know the legal red-lines relating to dealing with debtors.
3. Remain Realistic in Your Negotiations
The debt recovery process requires that you outline some irreducible minimums. However, such minimums must be realistic. This is essential because many debtors don’t pay, not because they don’t want to, but because circumstances have made it difficult or impossible for them to repay according to the agreed payment plans. So, as you negotiate with your debtors, ensure you remain realistic at all times.
4. Formulate Friendly Repayment Plans
As soon as a debtor feels that the terms of payment are unattainable, such a debtor is likely not to make an effort to pay. It’s understandable because the debtor would feel that whatever effort he or she invest won’t help them meet the terms. To counter this, come up with friendly payment plans for your debtors. Where you’re working with a debt collection agency Sydney, ensure that you communicate to the agency that a friendly repayment plan is important to your business. Granted, most debt recovery agencies have longstanding experience in the recovery process and, consequently, understand that almost every debtor who has failed to pay has a unique reason why that’s so.
As a result, agencies know how best to put pressure on the debtors without hitting the extremes. A good approach that most agencies are using is developing customised terms for every client. Even though working this way would see some debts take a considerably longer time to recover, at least a substantial amount of debt would be paid, unlike where the terms are unfriendly and debtors are discouraged and, consequently, don’t make efforts to pay.
5. Put Every Deal In Writing
Are you working with a debt collection agency or you’re pursuing your debtors on your own? Either way, ensure you put every deal you strike with your debtors in writing. Written agreements provide invaluable reference points whenever a conflict arises during the debt recovery process, including where things escalate to the courts.
6. Send Reminders to Debtors
Although debtors have a responsibility to clear their debts, you cannot just sit back and do nothing. You must keep on reminding them about their debt payment responsibilities and when their next payment is due. Also, when a debtor makes a payment, whether in full or in part, update your records quickly and send the debtor an acknowledgement of receipt and an update of the remaining amount.
7. Execute Your End of the Bargain
For your debtors to take you seriously, perform your end of the agreement faithfully. Whether it’s about sending reminders or documents, do so without fail. Also, if you prescribe some course of action if they fail to meet their obligation by a certain date, don’t hesitate to take that action when they fail. If you fail to take action, whether it’s submitting their details to a company that offers debt recovery services Sydney or instituting legal action, the debtors will most likely not take you seriously the next time you issue another threat. At the end of the day, you want the debts to be paid without losing your customers, right? For the best results, you must be tactical in your debt recovery process so that you don’t put your debtors through distress.