Collection is one of the most complex processes for all companies. Entrepreneurs generally have to prioritize certain tasks according to the resources they have available, whether capital or labor.
There are various debt collection techniques that are very effective and are considered essential in the recovery of accounts receivable , giving companies a better financial status. Therefore, we will mention 4 of the most effective debt collection techniques that are essential for every company or entrepreneur.
Effective debt collection techniques
1. Objection vs Situation
An objection refers to a reason that has little weight for a client not to make a payment. On the other hand, a situation is an event that prevents the client from paying, such as unemployment or bankruptcy of the company, among others. Particularly, in the first case, it is convenient to keep the lines of communication open and generate some technique to negotiate and reach an agreement where solutions are presented to keep the client with you.
2. Empathy
Empathy is essential to eliminate any trace of harshness or rejection, which will pave the way for a negotiation that will benefit both parties. Empathy with the client is generated when we listen, pay attention to their explanations and understand their situation.
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3. Interest in the Debtor
To generate the debtor 's interest in what you have to say, it is necessary to achieve a friendly and trusting approach, here we put a little empathy into practice. High-pressure techniques are no longer effective because they push the debtor away and, in the best of scenarios, they will pay you in the long term. Once you have their attention, take advantage of the opportunity to offer them other personalized payment alternatives, for example; discounts on the total amount of the debt or a total or partial restructuring of it.
4. Negotiation
The objective of a negotiation is to provide the debtor with a way out so that he can pay the debt. If the client has more than one negotiable option, which is not limited to “pay or not pay”, he will be tempted and committed to taking one of the available solutions and paying in the short term.
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Benefits of debt collection techniques
We can say that the most important benefit of debt collection techniques is that they help to generate better communication with the client, establishing solid and long-term relationships. Likewise, we will avoid the famous problems of liquidity failure due to non-compliance or late payments that compromise the financial situation of every company, mainly small businesses.
These effective techniques allow companies to maintain a state of tranquility, since they have the necessary resources. This makes it possible to generate medium and long-term strategies thanks to a good cash flow .
Technology as an Effective Collection Method Collection techniques are essential to maintain a good financial state. Therefore, collection efforts can be improved and made the most of by using technological solutions . There are many software programs on the market that allow you to automate the payment of accounts receivable, allowing you to optimize the time and resources needed to collect debts.
It is worth noting that technology does not replace the application of the other techniques we mentioned above, but it does allow them to be optimized and their effectiveness increased so that you can recover debts without forgetting about other matters in your company.
These are some of the techniques for effective collection , but they are not all, there are many more.
If you want to learn all the techniques to achieve a good cash flow and stop worrying about your company's finances, then you should take the online course:
💸 Effective debt collection management 💸
Courses that may interest you
Do you want to acquire more skills for Effective Collection Management? We remind you to also check out our courses Introduction to Finance, Financial Freedom and Personal Finance Planning, so that you can get the most out of this powerful tool.
