How to collect on a customer debt

Businesses need to get paid to stay afloat, and it’s no fun to spend a lot of time collecting a debt from a customer.

When someone doesn’t pay and you need to collect, here are some tips for doing it:

Be sure you know the rules where you live. State law debt collection rules vary. While the federal Fair Debt Collection Practices Act applies only to third-party debt collectors and lawyers, some state laws apply to any person who is owed a debt. Determine what actions you can legally take, such as whether it is possible to charge interest for late payment. A lawyer can help you make sure you’re following all of the rules in your area.

Draft a script for calls. Make it easier to stay calm by planning out what you’re going to say.

Maintain a professional tone. Explain why you are calling in a clear, confident way. Indicate that you were reviewing your accounts and saw that the bill was past due. Enter the call assuming it’s an oversight and keep the introduction light. Then, pause to give the client a chance to process and respond.

Prepare for possible replies. Think about probable reactions in advance and plan your responses to them. For example, if the client says they can’t afford to pay, suggest a partial payment or a payment plan. If the client says they have sent a check, let them know you will look for it and call back next week if you don’t receive it.

Send immediate follow-up. Send a letter or email with a summary of the conversation and what you decided for next steps. Sometimes seeing the plan in writing can encourage the client to act on it.

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