Collectors Needed – Joggers Only Need Apply!

Let’s face it, most people and organizations don’t want to pay. At the very least, they don’t want to pay on time. There are people in Accounts Payable (the dark side) who may be rewarded for their cash management skills. In large part, that means cash management of your money! (Before any of us take umbrage, the same reward system is probably in place in our own accounts payable departments.)

Debtor amnesia begins to set in quickly after your customer has received the goods or used your services. There is no cure. The condition will remain as you deal with the customer on a credit basis. There is treatment however in the form of ‘jogging their memory’ at different stages.

We have always known in our business that they squeaky wheel tends to get the grease, but just like learning jogging skills will take you further, with less injury, the same applies to how and when you jog the memory of your customers.

  1. Almost every customer needs to have their memory ‘jogged’.
  2. Most customers know and may agree with #1, but they don’t like it.

The Pipsqueak:

This ranges from just sending out a second invoice, to a second invoice with “PAST DUE” stamped in bold red, to a letter or email that is ‘just a friendly reminder’. They should know it is ‘just’ a friendly reminder, because the paragraph starts with, “This is just a friendly reminder,”.

Maybe you didn’t hear me?

If there is no response, we ill escalate, going past the ‘perhaps your forgot’ to ‘you have not replied to our earlier correspondence’ and here you may want to begin to let them know of direct or indirect consequences for non-payment or contact.

Is payment a success?

Perhaps payment is received as a result of the memory jogging squeaking efforts, but the objective of professional collections is to keep the customer, collect the money in full, and to have the customer pay on time – in the future.

This may be an excellent time to compose and send a letter to your customer thanking them for the chance to work with them to resolve the recent outstanding invoice and to let them know (ever so gently and diplomatically) that payment in the future, with the terms they agreed to, is expected on time.

A variation of this letter should be sent to new customers before they even receive an invoice. Why wait for someone to be overdrawn at the memory bank?