How to perform a difficult collection and reduce losses

The increase in defaults can make it difficult for companies to grow. The problem is even worse as the company faces a in many cases difficult collection, which poses risks to the relationship with its customers or suppliers. Knowing how to handle this situation is essential to reduce losses from late payments.

arbitration

Attempting arbitration can be a good way to resolve difficult collections issues. You have to be for that flexible and try to find a solution that is attractive to both the debtor and you.

Seek set deadlinesoffer payment rebates and try to negotiate how the customer can make the difficult collection payment on a term that doesn’t affect the financial health of your business.

How to approach the debtor?

Strategies range from hiring a collection agency to send SMS messages to the customer.

A SMS systemoffers, for example, solutions that replace telephone calls and avoid additional costs due to difficult debt collection.

In the case of debt restructuring negotiations, contact via SMS ensures a 20 to 30% higher return compared to other channels such as e-mail, letter and telephone. In addition, the costs are 95% lower.

“Using an SMS delivery system, the company sends a statement about the debt. The customer can react according to his interest and even receive the barcode for it pay the debt. The advantage is that the contact is made directly and the customer feels less intimidated than on the phone,” explains Márcio Capassi, Head of Solutions at Zenvia, an SMS solutions company.

Step by step for a difficult collection

1. Don’t let the debt spread: Always keep in mind payment term From the debt. The more time passes after the expiration date, the more difficult it becomes to collect.

2. Send reminder: Before you undertake a difficult collection, send a reminder to the debtor. This can be an email, an SMS or a letter. If yes impersonalimmediately after expiration, prevent him from feeling intimidated: the customer could have simply forgotten.

3. Make a personal contact: If the reminder doesn’t work, try a different approach. direct and personal. A warm and understanding call with payment options and negotiation alternatives can get the customer to settle the debt quickly.

4. Let the collections team do the work: If none of the above methods work, consider a Specialized team at collections. If your company does not have one, you can hire a specialized company. Keep in mind that costs can be high.