Collecting Money in a Rocky Economy
by Paul Weyland, reprinted with permission of RBR.com
The last things you need in a rotten economy are problems getting paid, but bad economies and collection issues fit together like a hand in a glove. Bill collection is not fun and it eats up valuable selling time. Here are some tips on collecting in a recession, or any other time.
1. Act fast. The longer you wait the colder the trail becomes. As soon as you realize you have a collection issue you must get busy. More than thirty days with no payment from a new client is reason enough to become concerned.
2. You are in a race with other vendors. If the client owes you money he probably owes many others as well. The adage, “the squeaky wheel gets the grease” applies here.
3. Make it personal. Make certain the client understands that you have bills to pay. Communicate things that personalize your situation and make you stand out from the client’s other creditors.
4. On your first collection call give the client the benefit of the doubt. Say that you had an invoicing problem and ask the client if he received his bill. If the client says he didn’t and you know the invoice indeed went out then the client could be lying and you’ve got a problem. Offer to deliver a duplicate invoice in person immediately in exchange for full payment.
5. Debtors resent you and won’t return your calls. The client was easy to contact when you were setting up the advertising schedule but now that he owes you money you are the bad guy and he won’t return your calls or email. That’s why it’s important to have his cell phone number. Get your client’s cell numbers early in your relationship. With the cell number you can call from unfamiliar phone numbers and the client will more likely answer.
6. Always accept partial payment. If the client says he cannot pay the entire balance, ask what he can pay immediately. If he has cash in his register or wallet offer to take the cash and then get him to sign a receipt for cash that you can take back to the station.
7. Set up a payment schedule. Make a contract you both can sign that designates specific dates for payment installments. Pick up the payments in person. Always ask if the client can pay a little more this time.
8. Charge it. Ask the client to pay with a credit card. Remind him he can earn points or airline mileage.
9. Avoid collection problems the easy way. Ask for cash in advance with each new client. Why should you have to be the bank? As a rule, bars, restaurants, manufactured home dealers and promoters should always pay cash in advance. Why not extend that rule to all product/service categories? If you don’t ask you don’t get.
10. Trust your instincts. If it smells like a fish, it’s a fish. If you have even a vague inkling that you’re going to get burned don’t give the client credit. Otherwise, you’ll probably end up working for free.
(source: Paul Weyland is a broadcast sales trainer, author and speaker. You can reach him at www.paulweyland.com or by phone at (512) 236 1222. Read Paul’s book Successful Local Broadcast Sales, available online or at bookstores)
