Debt Collection Agency and Customers
How the use of a debt collection agency can preserve your customer relationships
Did you realise that a debt collection agency can help you to maintain your customer relationships? That probably sounds counter-intuitive. Traditionally, debt collection has tended to focus purely on the money collection process, and has not been concerned with relationships.
But that is changing. In the modern business environment, where customer goodwill is essential, using a debt collection agency can help to reassure your customers.
Personalised debt recovery
So, how can a debt recovery agency help maintain your customer relationships? One way is through providing a tailored debt recovery solution. This can include flexible payments, or paying through more convenient methods. Customers in genuine difficulty with payments will find this helpful.
Another popular personalised method advised by modern debt collection agencies is increasing the debt recovery time. This will give customers more time to pay, whilst ensuring that payment plans are affordable and achievable, and this can be supplemented by the freezing of interest for the duration of the instalment agreement.
Appropriate collection methods
A modern debt collection agency will also be flexible in the methods they use to collect debts. You should always speak to an agency acting on your behalf to ensure that their approach is ommercial and professional. Often, you want to preserve a long-term business relationship, while ensuring that the debt is repaid, and an effective debt collection agency will be sensitive to this requirement.
Bad debt limitation
We all know that late payment is a drag on company cash flow and that bad debt kills profits. Often it is a sign that a debt collection agency is falling short and failing to do their job properly. But there are some steps that you can take to avoid getting into a bad debt situation:
- Make sure you do a credit check before talking about payment terms
- If a customer’s credit report is poor, consider supplying on a proforma basis or get at least a meaningful prepayment on order
- Make sure you have a signed contract that includes sanctions in case of late payment
- Ensure that your customer reads through all documents fully before they sign
- Follow up with the customer when the payment date is close
- Where necessary, reiterate the consequences of late payment
- Keep a record so that you have information to pass on to the debt collection agency – Also find out more about our latest article on why use a debt colletion agency
Choose a modern debt collection agency like CLI
Increasingly, doing business is as much to do with customer satisfaction as it is with profits. By hiring a modern, responsive debt collection agency, which can handle any debt sensitively, using innovative methods, you can ensure payment of your debt without damaging your customer relationship.