Debt Recovery and minimising Costs

Debt: How to Optimise Recovery and Minimise Costs

 

Recovering debt can be one of the toughest aspects of running a business. Whether you are seeking to recover a debt from a local client, or are faced with an international debt collection challenge, it can be difficult to get the balance between cost-effective debt collection and retaining good customer relationships right. To help point you in the right direction, here are some tips on how to optimise your debt recovery.

 

Standard Criteria

Setting up standard criteria for certain situations can help to give you and your employees clear direction and guidance on how to handle each debt situation while providing a flexible overall approach. The criteria should be split into three categories, representing different customers:

  • Regular payer
  • Wants to pay but unable to currently
  • Not likely to pay

Each one of these categories of customer will need a different approach when it comes to debt, so can’t be approached in the same way. Knowing which category your customer belongs in will also enable you to put their behaviour on debt in context, leading to a more effective and targeted approach to debt collection that is more likely to optimise your recovery.

 

 5 Steps to Maximising Returns

Debt collecting requires flexibility, communication and a good understanding of your customer, their needs and their situation, so there is no one-size-fits-all solution. Here are five tips that can help you to develop an effective and flexible debt recovery process:

  • Try to classify your debtors into one of the three categories mentioned above
  • Listen to debtors, understand their circumstances and keep records of your interactions with them, to help inform your approach to their debt
  • Channel your knowledge about your customer base into a set of standard criteria and keep these criteria updated as your knowledge increases
  • Start debt negotiations by asking your customer what terms they might be able to work with
  • Be prepared to hand over debt progression to a reputable debt collector.

 

Organisation, Consistency, Flexibility, Empathy

Securing debt repayment can seem daunting, but if you are well-prepared, and take an approach that is organised, consistent, flexible and empathetic, you will be in the best position to maximise your recovery prospects, keeping costs to a minimum and maintaining important client relationships.

But if you need help or advice on debt recovery, turning to a reputable debt collection agency can be a good option. To find out more about how we can help you secure repayment of your debt in a modern, professional and responsible fashion, get in touch with us today.

CLI specialises in debt collection and international debt collection with over 10 years of successful support to businesses.