A collector discussing debts with a client

6 Tips for Successful Debt Collection During the Pandemic

While most states are now reopening and have eased restrictions, the financial repercussions of the pandemic are unfolding gradually.

Back in early 2020, the growing cases of COVID meant that a lot of businesses had to quickly adapt to new changes. Some also had to navigate major operational challenges, while others had to shut down due to financial difficulties, leading to an increase in borrowing.

And naturally, the financial and operational challenges posed by the pandemic limited small businesses’ ability to pay back loans, making credit collections in the US and around the world a nightmare.

So, if you’re hoping to resume debt collections, you’re going to need all the help you can get. Here are a few tips you can start with.

Organize Your Data

Your data is going to tell you everything you need to know about your customers in order to successfully collect a debt. But it isn’t going to be much help if the data isn’t centralized or organized.

You can centralize the data by integrating all of the customers information into one database. It will help your staff to quickly review accounts and manage them. Not only will this streamline the work, but it will also eliminate room for errors, thus boosting overall efficiency.

The better you understand each customer, the easier it is for you to connect to them at a personal level and expedite payments. The data, when used correctly, would help you do that.

Figure Out the Ideal Communication Methods

A person having a conversation on receiving debts with a client on the phone

In order for you to receive your debts, you need to be able to communicate with your customers. But all customers are different, and you may have to figure out which communication method works best for each.

For instance, it may be easier to reach some customers via phone, while there are others who’d never pick up, so you’re better off leaving them emails and text messages.

Once you do settle on the best communication channel for each customer, try and automate the process. This means setting up automatic alerts and payment reminders. Not only would automation help you manage the process better, but it would also be more effective in terms of debt collection since you’ll be able to send more alerts through automaton, i.e., better reinforcement.

Digitization Is Key

To automate things, you’ll need to invest in digital operations. But digitization is worth considering for other reasons too.

With digital solutions, you can streamline operations and process data faster. Moreover, it’ll help you monitor and control everything much more easily. In other words, with a digitalized solution, you’d never lose control of the collection process.

Additionally, considering the fact that we’re operating in very volatile times, digitization will boost transparent reporting and will help you predict any financial challenges much more easily.

Make Payments Easier Through Multiple Channels

After dealing with several customers, you probably realize now that every person is different and has their own comfort zones. Some may like to pay using an app, and others may like to pay through an online portal. Offering them multiple channels to pay will increase the likelihood of them actually paying on time.

Moreover, it would help to identify the methods that certain individuals find tiresome. For instance, do you require them to log in from a computer before proceeding? Because that may discourage some.

Also, while you’re offering all the payment options, it’s important to ensure that all of the options are user-friendly. If a customer tries one or two methods and finds them time-consuming and extensive, they’d be discouraged from paying. So, it’s important to ensure that every channel is super-efficient.

Take A Human Approach

It’s important to remember that your customers are more than mere accounts.. This means stepping back and reflecting on your approach for each customer. This means that instead of resorting to any harsh measures, you should have a conversation with the client and agree on a practical payment plan.

In general, it’s worth remembering that maintaining ethical standards and retaining an older, albeit late-paying customer is better than acquiring a completely new one. Moreover, taking legal action is not only expensive, but it’s also a bad reflection on your company.

Most importantly, taking a human approach has a whole new meaning now that we’re dealing with the aftereffects of a pandemic. Almost everyone has suffered financial losses in the past two years, so it’s crucial to be sensitive and to understand this mutual challenge.

A person reviewing document related to business’s debts

Invest in Bad Debt Collection Services

Account receivables that are long overdue can become a burden for any small business. And dealing with them can be time-consuming and complex. And naturally, as a small business owner, you may not even have the time, energy, or expertise to manage bad debts properly. And this would lead you to do a poor job, resulting in losses, both monetary and in the form of clients.

Therefore, it’s best to leave this exhausting endeavor to the experts. A collection agency for small businesses can help you navigate through bad debts and account receivables without losing any clients or customers in the process.

Collection agencies like ours can help you figure out an effective collection strategy that would allow you to streamline payment cycles and increase collection rates.

If you’d like to learn more about our AR management system or need help with account receivable and collection, get in touch with our team of collection experts at Cash In USA.

We can also help you out with post-judgment collections!

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