Debt Collection and Coronavirus
Debt Collection and Coronavirus
These are tremendously challenging times for all businesses. The coronavirus pandemic has disrupted every aspect of our lives, including the normal operation of the economy.
One of the most difficult problems associated with this disruption is the issue of debt repayment from customers affected by coronavirus. If you trying to claim back a debt but the customer has been affected by the pandemic, how should you tackle the issue?
The first step is to accept that this is an unprecedented situation. It may be that a small minority see the pandemic and the associated shutdown as an opportunity to avoid paying their debt. But for the vast majority of customers it is far more likely that they have been one of the many people who have been negatively impacted, perhaps through being furloughed on a reduced income, suffering significant loss of business, or even losing their business or their job altogether.
These are all difficult personal circumstances, and your overall approach to collecting debt at this time has to involve an acceptance of the difficulties many of us are facing. Here are some ideas to bear in mind when you are considering debt recovery affected by coronavirus.
Customer Engagement
The key to debt recovery, as with many other aspects of business is communication. You may be angry or frustrated about non-payment, but keep your communications professional and polite. Be prepared to use whatever means of communication are most appropriate, be consistent in communicating and try, politely, to establish the reason for their non-payment.
Payment Flexibility
It is always a good idea to be flexible where possible when it comes to repayment and this is certainly the case right now. If your customer has been furloughed or made redundant, they will have reduced finances, so you need to be realistic. No matter how important your debt is to you, it is reasonable that in difficult circumstances, customers will have to prioritise food, housing and so on. Be prepared to reach an agreement on a payment method that suits both parties. Even if this means accepting a slower debt repayment, this is preferable to trying to escalate.
Be Thorough with New Customers
Particularly during the current crisis, it is important to be satisfied that any new customer is able to pay for their goods or services. Be as diligent as possible in establishing how and when a customer will be paying upfront, as this can help to minimise problems later on.
Consider a Debt Collection Agency
Modern debt collection agencies have a range of tools at their disposal to efficiently recover debt in a professional way that minimises hassle and maintains the customer relationship. Getting advice from a skilled agency can help you to ensure effective debt repayment, particularly during a time of crisis.
CLI specialises in debt collection and international debt collection with over 10 years of successful support to businesses.