Consumer Collections

As a small business owner, you feel it when your fortunes shift — even just a little bit. When a consumer doesn’t pay for your products or services, for example, covering your expenses becomes much tougher. Fortunately, you can shore up your financial strength by being proactive about the balances on your books.

On one hand, you want to pursue collection once the account is anywhere from 30-90 days past due. At this point, time is of the essence because your chances of recovering those funds have already fallen to 75 percent.

When this happens, it’s all too easy to project motives on a non-paying consumer and transfer their account directly to collections. But it’s important to understand there may be other barriers preventing their ability to pay, barriers you are not aware of. If you resolve these situations skillfully, you’ll not only have a better chance getting paid, but you also may gain a good consumer relationship for years to come. Below are three situations that could explain a given non-payment and tips for resolving them. Start with granting the consumer the benefit of the doubt, putting a smile on your face and picking up the phone. You may be surprised by what you hear.

The confused consumer:  It’s always possible your statement never arrived or that something in the bill is confusing. Ask, get an understanding of what has happened, and come to an amicable agreement regarding the next steps.

The dissatisfied consumer: If the consumer flat-out refuses to pay, your chances of recovering payment are greatly diminished unless you take the correct action. In this case, remaining calm in the face of anger is crucial. Ask that person for an accounting of the reasons behind their decision to not pay. While that consumer is talking, listen — don’t interrupt and don’t jump in with explanations and corrections. At the end, repeat what you’ve heard. If a mistake was indeed made on your end, apologize and make it right. Even if it appears the consumer is at fault, offer a solution or a couple of options for the consumer to choose from so you can reach an agreement regarding payment.

The consumer with legal issues: In rare instances, a consumer may tell you payment isn’t coming until a legal issue, such as a divorce or loan approval, is resolved. Your best response is to obtain as many details as you can and document the conversation. Before you move forward with debt collection, it is important to understand your rights and the consumer’s rights. A third-party debt collection partner with professionalism and expertise in federal, state, and local collection laws can help you determine those next steps and who is responsible for paying.

When clients don’t pay, it’s important to take time to learn what the underlying reasons may be. When you work with an experienced collection agency such as IC System, however, you can increase the odds of recovering your money and keeping that consumer in the long run.

Need collection help?

Call us at 1-800-279-3511 to REQUEST PRICING!