What are some debt collection strategies?


Quick Answer

Strategies to help businesses with debt collection include having an effective payment tracking system, following protocol after missed payments and keeping payment terms short, reports Entrepreneur magazine. Offering a number of options for payment makes it easier for clients to pay on time. When phoning clients or customers whose payments are past due, businesses should remain courteous and follow Fair Debt Collections Practices Act regulations.

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Full Answer

A tracking system, such as a software program that informs businesses when payments become late, helps initiate prompt collection action, explains Entrepreneur. Written payment guidelines for clients create an agreed-upon protocol that doesn't surprise clients when a business takes action after missed payments. Instead of drawing out payment terms, businesses may be better off offering discounts to clients in exchange for prompt payments. Before taking on new clients, businesses should conduct credit checks to ensure that they can reliably make payments.

When making debt collection phone calls, businesspeople should display confidence by remaining pleasant, speaking up and maintaining focus. The Fair Debt Collections Practices Act stipulates that debt collectors can only call between 8 a.m. and 9 p.m., Monday through Saturday. They can only call on Sunday if they are unable to locate clients at any other time. Callers should keep logs of all collection communications that include the time of each call, the individuals they speak to and the details of each conversation, advises Entrepreneur.

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