The most immediate way to resolve a cashflow crisis is to call your debtors. But, let’s be honest, no one likes making those phone calls. Here are three simple steps to ensure your phone call results in a debt paid.
Step 1: Preparing to make the call
Before calling make sure you have all the relevant information. You will need contact name, phone number, amount outstanding, what the debt is for, date of last payment, number of attempts to collect the debt etc.
Step 2: Making the call
It’s important to identify yourself and confirm you’re speaking to the right person. If no one answers, leave a message but don’t reveal that the call is about an unpaid debt. Always stay calm and professional, don’t get emotional. Be a good listener, don’t argue, preach, judge or moralise but stay firm in your quest to recover the debt.
Never underestimate the power of silence. Use it to put the burden of conversation on the debtor. For example, “I need your payment no later than Friday.” Pause. Don’t say another word. You are applying pressure in the most powerful way possible.
Step 3: Getting the debt paid
Once you have established payment is overdue, ask for payment in full. Offer to take a credit card payment over the phone. If that is not possible, ensure you get a promise of when payment will be made. Make sure you document this agreement in a letter or email.
What should you do if the customer can’t pay in full? Offer a payment plan. Start with offering to split the bill into two payments with specific dates. Suggest weekly or bimonthly payments, as opposed to monthly payments. This will relieve your cash flow and get the debt paid off more quickly.
Optional: SMS Reminders
No one likes picking up the phone and calling debtors. You can try sending statements and reminders via email before calling. But phone calls are more intrusive than letters or email and usually get a more immediate response. Some companies are now using SMS reminders which tend to have a higher success rate in prompting payment than email.
The fastest way to resolve a cash flow crisis is to call the people who owe you money. Interested in more tips on how to manage your cash flow? Try an Online Course or enrol in the Acceler8 Academy Program.