While we always encourage in-house debt collection tactics through collection calling or letter campaigns, we often get approached as to whether businesses should conduct in-person debt collection campaigns. In-person debt collection is rarely done because typically businesses are dealing with non-local customers. Nevertheless, it is an option for businesses because it is the strongest demand for payment; so use it sparingly!
If you are having a difficult time coming to an agreement with a client on payment, an in-person meeting could be effective because you are able to discuss the invoice and debt in question together face-to-face.
Carefully-coordinated salesperson involvement can be effective when the customer is located outside of the local area of the credit department. Depending on the nature of the business and the role of sales, a salesperson could already have a well-established connection with the delinquent customer. In this situation, a salesperson could be ideal because:
- They most likely have a stronger connection and trust with the customer compared to a collections representative from the credit department.
- They could be the source of the delinquency because of promises made during the sale.
Before developing a policy that requires your salespeople to collect 100% of past-due accounts, consider the affect it could have on your incoming sales. Always assess the cost these actions will have on your company, along with company morale, before instating any sort of policy.
Where to collect?
If your business decides to conduct a collection visit, always try to get the customer to come to your office. In the meeting, your goal is to determine what truly is getting in the way of the customer paying. Typically it is one of three things: dispute or refusal of payment, lack of funds, or the belief of a lack of funds.
If you must travel to their office, always make sure to provide the following:
- A copy of the customer’s ledger
- Copies of invoices in question
- An envelope addressed to you for payment
- Copies of previous correspondence to prove agreed upon terms and what has already been said.