6. Friendly reminder email/letter sent 7 days after due date
7. Courtesy call 14 days after due date – Assume it is just an oversight
8. Final letter after 21 days.
9. 28 days outsource to collection agent.
Debtors who have not settled their account with you by point 7 above despite all your usual follow ups we recommend you send the final email below before outsourcing the case (s) to a third party for debt collection.
This email/letter has a number of benefits to both you and the debt collection company including following:
1. It will prevent your client from burying their head in the sand
2. This is a cost free method to effect payment
3. It is a pre-introduction to the third party so no surprises when they receive the debt collection letter including costs and interest.
Once this email has been sent it is important that you follow the procedures set out above. If payment is not received by point 8 above then we recommend you do outsource straight away after the deadline. Failure to do so will dilute any debt collection procedures taken by the debt collection partner.
I would also recommend that when outsourcing cases to a collection partner that you provide as much details and documentation as possible to avoid unnecessary delays and hurdles put up by your debtors.
Upon instruction of a case I would recommend you provide the following:
1. Full details of the debt
2. Debtor full name and address and all contact details
3. Copies of invoices and statements (To enable late payment interest to be calculated)
4. As much relevant correspondence and documentation as possible such as purchase order numbers, emails, letters
5. Any known disputes or issues raised by the debtor
6. Anything else you may believe will assist with the collection process.
Following the above steps will reduce debtor days resulting in improved cash flow and a healthier bank balance. It will also reduce the internal time spent chasing unnecessary unpaid invoices. Identify none paying debtors early so appropriate actions can be taken to avoid bad debts and bad debt write offs. Also keeping proper records and documentation will prevent none paying debtors of using lame excuses for not paying their debts.