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The Secret to Solving Collection Problems

The bill is overdue and the collection letter has come back undelivered. The phone is disconnected.

This situation isn’t unusual for the accounts receivable department. Tracking down those with overdue bills is just part of the job. But the longer it takes, the harder it is to contact them, and not just because you’re no longer a priority. People with financial problems often move. Some do not leave a forwarding address.

Your collection process is only as good as information you collect from the very first contact with your customers. It’s surprising how many organizations struggle to recover their A/Rs simply because they do not have current addresses, phone numbers and other information needed to follow up appropriately with customers.

But there is one easy solution to solving collection problems: Get the information up front.

The best time to gather accurate contact information is when someone first becomes your client or customer. Try sending/giving the packet in a welcome package that includes:

  • Customer information form
  • Financial policy
  • Credit card authorization form
  • Cancellation policy
  • Payment options
  • A list of what a customer may need to get started such as any forms of identification or insurance.
  • List any collection fees, interest or penalties for non payment, if any.
  • Insert language authorizing your business or your agents (such as collection agencies) to contact you regarding your bill with the information provided.

Customers will give you more accurate information when they can take their time to fill out the forms. It removes the excuse that they left their information at home. It shows that your office is organized and will keep their Social Security number and other identifiable information secure.

While it’s not always easy to ask for personal information, doing so up front shows you expect payment and will deter customers who may not have had any intention of paying you. Solve your collection problems by getting the information you need.