You’re the sales manager. So it’s no surprise you’d like to focus on managing and expanding your sales team. The trouble is, you have a big account that’s 30, 45…now 60 days past due. It’s eating up your time and you’re worried it could impact your ability to get ahead at work. It's just a matter of time before this becomes a larger issue, right?

What do you do?

Before you make a move and try calling the customer yet again, you need to consider why the customer isn’t paying. This helps you take the right approach in your attempts to collect. Is it a simple oversight? A natural disaster that’s impacted their company? Maybe cash flow issues?

Should You Send Accounts To Commerical Credit Collection?


7 Questions to Ask

To help you get to the bottom of it, here are 7 questions to ask so you can size up the situation – and what your next step needs to be:

Question #1: What are the particulars of the account? This includes the size of the company, location, seasonal ebbs and flows, size and age of the debt, original loan conditions and industry trends that could be impacting their ability to pay. Also, consider any other sources of information you may be able to access, such as data from credit bureaus. This helps you get more familiar with the business's standing overall.

Question #2: What contact has been made with the customer in the past? In other words, when and how often have you reached out to them? Via what methods? What information were they able to provide? What is their reason for the loan falling past due? What, if any, actions have been previously taken? Considering the reactions can give insight into particulars of the debt.

Question #3: What’s your personal assessment of the account? In other words, why do you think the account is now delinquent? What kind of client is this? Are they typically past due, or is this out of the ordinary for them?

Question #4: What are some possible (realistic) solutions? In a perfect world, your first step toward getting paid would result in a full payment. If that’s the case, you simply need to notate the details of your interaction for the account and move on. However, in most cases, you’ll simply get a promise to pay. In which case, you’ll need to follow up yet again.

Question #5: Are negotiations effective? Have you been able to clearly define when, how and how much the client will pay? Keep in mind, if your payment is late, then the company is likely behind on paying others, as well. How do you know your payment will take priority?

Question #6: At what point do you escalate collections activities? If you haven’t been successful securing payment, what’s your next step? If an aging account is headed toward the 90-day past due mark, it’s time to consider outside expertise at a collections agency.

Question #7: Are your company’s stakeholders worried a commercial collections agency could alienate a long-standing customer? They’re not alone, and the concern is understandable before you look at the full situation. Many companies are afraid to enforce strict collection practices or to hire a collections agency because they don’t want to offend the customer. But how good is a customer if they’re not paying their bills anyway? What’s more is that a company may be reluctant to continue doing business with yours if they have an outstanding balance. So not only have you lost money, but the relationship, as well. You have nothing else to lose, and everything to gain.

With a collections agency, they have extensive knowledge of the most persuasive collection techniques. In addition, delinquent customers are usually anxious to clear invoices referred to collection agencies rather than risk damage to their credit ratings. The bottom line? You can focus on other sales priorities and managing your team, while a collections agency works to get you paid in full.