1) Know your customer. Before you pick up the phone, make sure you know important facts about your customer, such as:

• Are they a large, medium size, or small business? This is important because the size of the company will determine who your payment decision maker will be. The smaller the company the higher the level of decision maker. For example, in a very small business the decision maker will probably be the president of the company or owner. In a medium size business, try to reach the controller or general manager. In a large business your best target decision maker may be the accounts payable manager or supervisor. Remember if you don’t involve a decision maker, don’t expect a decision.

• What is their payment record with us? The history of the customer’s payment record may help you understand why your account is past due. If they usually pay on time but have not on this occasion, there may be a dispute. In this instance, be sure to check with the customer that there is not a problem before you demand payment. If the payments are getting slower each month, your customer may have a cash flow problem and a more aggressive approach may be needed.

2) Have a positive attitude. Calling customers and reminding them of their unpaid bill is not always a fun-filled task. But it does not have to be an unpleasant experience. Be upbeat and professional. Your mood will be contagious. If you sound interested and enthusiastic about your job, you are much more likely to get a positive and satisfying result. Remember, if you don’t sound interested in what you are saying, the other party will not be interested in hearing it.

3) Be a good listener. Be sure to listen to their name and to make a note of it for use during the call and for the next call if needed. Listen to the mood of your customer. Their mood will to some degree affect the pace of the call. Listen to what they do say and what they don’t say. Cutting a check or a check is being processed does not necessarily mean a check is being sent. Take notes and refer to existing notes. That way you will stay focused and be an active listener throughout.

4) Ask the right questions. One of the most common questions asked by collectors is "When will you be sending a check?" It is also one of the worst questions because it abdicates control of the outcome. The only time to ask a customer when they plan to send a check is when you are not concerned by whatever date they give you. If all you are doing is cash forecasting, the question is fine, but if you are trying to facilitate fast payment it is the wrong question. A better question is, "Will you be mailing the check today?" or less assertively, "Will you be sending payment this week?" In both of these examples you are still maintaining control of the time frame and are less likely to be manipulated by the answer.

5) Follow up progressively. Each collection call to your customer should have a theme.

Call #1. Benefit of the doubt. Remember some customers will pay you because you brought the matter to their attention.

Call #2. Firm and assertive. If the first style doesn’t work, your next call will be designed to cause the customer to pay you to get you off their back.

Call #3. Explain the future. Some customers will only pay when you explain the consequence of nonpayment. If you have to make a third call about a past due bill, that is the time to apply this kind of pressure.

6) Always keep your word. Credibility is one of the most important aspects of a collection call. Your customer must always believe you mean what you say. If you promise action will be taken on a given date you must take that action, or don’t say it. Also, be sure that other departments in your company support your actions. There is nothing worse than telling a customer a certain course of action will happen only to be overridden by another department or authority. Remember, when people know that you always do what you say you are going to do, they take you very seriously.

7) Always remain calm. Do not allow an angry customer to aggravate you. Sometimes debtors think the best defense is a good offense. They will become angry in order to deflect you from your goal of getting paid. Do not be tempted into an argument. That just gives the customer a reason not to pay. Remain calm, be polite and stay focused. You are in the right. Ultimately, a firm but fair approach will get results.

8) Get a commitment. Your ideal collection call will get the customer to commit to pay in full today. If that is not possible, get a commitment to something. Any call that does not result in a commitment to pay or a commitment to call back with a payment date is a wasted call. Always get a promise of something, that way all your calls have value.

9) Summarize carefully. Did you ever receive a payment promise and the check didn’t show up? If so, it may be that the customer forgot your call the moment they put down the phone or they decided you were not that concerned about the outcome. Never leave the customer unsure about your expectations. Summarize the agreement carefully, going over each point. If the solution was complex put your summary in writing.

10) Be effective, not efficient. Fifty calls a day may be an efficient call rate, but if none of the calls result in payment it was not an effective call rate. Quality rather than quantity is the key. Make each call worthwhile and your success rate will be high. Place A Claim Now

Recognizing Red Flags for Overdue Accounts
and the Best ways to prevent them

Most businesses follow the 90 day rule when it comes to delinquent customers: After an account is 90 days past due, they call in a collection agency.

Turning an account over to a collection agency shouldn't always be a last resort. In fact, some accounts require immediate attention. When you see the following warning signs call R.H.K. Recovery Group right away.

A customer continually ignores your collection letters and phone calls.

A customer tells you they are unable to pay an invoice and will not work with you to develop a payment schedule.

You can no longer contact a customer — they've moved and left no forwarding address, they've gone out of business, or their phones are disconnected.·       

A customer has promised to pay on several occasions but has not sent a check.·       

A customer continues to delay payment by using diversionary tactics. They may claim they never received your invoice or shipment, tell you they don't agree with your payment terms and conditions, or use other excuses to avoid paying altogether.

Avoid Check Fraud

Business owners face a growing risk of check fraud as computers make it easier to create phony checks and banks allow customers to open accounts via telephone and the Internet.

Businesses lose substantial amounts each year to bad checks, with industry estimates attributing half of those losses to check fraud. Some industry analysts see the problem of bad checks growing as much as 25 percent annually in the years ahead.

Many businesses rely on check guarantee, check verification, and collection services to fight check fraud. But preventing acceptance of fraudulent checks in the first place is the best policy. According to a recent Ernst & Young survey, 75 percent of merchants used a third-party verification service to pre-approve checks, 16 percent used manual approval methods, and 13 percent used in-house authorization systems.

Only about one percent of the 60 billion checks written each year actually bounce. One-third of check fraud stems from closed accounts and "check kiting," according to the Nilsson Report, a news service for the payment services industry. Another 27 percent is due to counterfeit checks, 24 percent to forgery, and 12 percent to bankruptcy, and 5 percent of check fraud is attributed to other reasons.

Business owners in restaurants and hospitality businesses run a higher than average risk of check fraud. Merchants operating in industries where stolen goods -- such as electronics -- can easily be resold also run a higher risk of check fraud.

Collecting on bad checks can be difficult if not impossible. Nationally, less than a third of checks returned for insufficient funds are ever paid in full. But collection efforts are far more successful if the merchant acts quickly to seek payment. If your customer does not make good on the return check immediately than don’t waste any time, place the account for collection with R.H.K. Recovery Group