The collection call is one of the most costly accounting activities, because it requires so much valuable staff time. Unfortunately, this is rarely an efficient activity, because poor call preparation results in a great deal of wasted time.
To improve the effectiveness of the collection call, make sure that your collections staff has the following information available before placing a call, which gives them a better chance of resolving the collection problem on the first try:
- Proof of shipment or delivery, in the case of a “hard” product sale. Where possible, obtain a receipt signature from the delivery company.
- A customer signature on an approval document, in the case of a “soft” service sale
- Notes on earlier conversations
- Copies of the customer purchase order and your invoice to the customer
- Escalation list of contact names
The last point is frequently ignored by the collection staff. They have a tendency to keep calling the same person every time, and then move on to the next customer if their primary contact person does not answer the phone. This can delay collection for weeks or months. Instead, maintain a list of multiple customer contacts, and call as many of them as necessary until a real person answers the phone.
The level of organization described here may be foreign to your collections staff, so be sure to implement ongoing collection training to ensure that they are properly organized before picking up the telephone.