Gravity Credit Management, formerly known as, ICMS, is an Auckland based debt collection agency with nationwide coverage and has over 30 years of experience in this field.
Whilst the sales function of a business is often seen as one of the most important aspects of a business, and whilst it is vital, many companies have focused so much energy on sales that credit management processes often fall behind.
Effective credit management can help to avoid falling into this trap. No matter whether you are a one-man-band, or a business with a turnover in the millions, credit management should always be given priority. Simple checks can sometimes save you from making big mistakes when it comes to granting credit.
What we have seen over the years through a specialized team that with appropriate care, nurturing and experience (especially relevant in COVID times) it is possible to maintain and sometimes foster relationships with customers.
The most important of our learnings overtime is set out below – but believe us when we say it, there are many others.
- Set clear expectations.
- Effective credit management starts before the sale.
- Any payment policies should be communicated upfront.
- Terms & Conditions are vital, and not those accepted by conduct!
- Ensure invoices are raised immediately.
- Immediate invoicing eliminates questions and queries after the event.
- Customer has costs at front of mind for the next payment run.
- Being proactive and chasing before the invoice is due means that any issues come to light quicker, and you can resolve them before customers delay the payment. You should try to conduct the call as a ‘customer service’, rather than a collection call.
- Record keeping is paramount.
- This includes all conversations.
- Notes and commitments about payment need to be current and up to date in case some else picks up the collection.
- Be prepared to listen.
- There is often something going on that you may not be aware of.
- Don’t be afraid to check in during the call “did I hear that right?”
- Utilise empathy
- Any form of financial difficultly can be embarrassing and not to mention stressful.
- Get to understand what you are dealing with, make them feel supported and if need be refer them to alternative forms of assistance or agencies. Be sure to follow up.
- Remain calm.
- Often those that are irritated or upset find it hard to continue in this way if you are behaving rationally and calm.
- It’s essential you remain calm even when they may be loud or irate.
- When the situation has settled, the conversation can continue. Failing that terminate the call gracefully and call back.
- Be prepared to offer solutions.
- Discuss all options – look at a payment plan to make payments more manageable.
- Can we schedule payments in line with wages or salary?
- Explore your terms and conditions around extended terms.
- Agree on a repayment plan or proposed payment date.
- When carrying out telephone collections, always gain commitment at the end of the call, even if it is only a date to call back.
- You must always ensure you collect as much information as possible; names, follow-up dates and firm commitments.
- Always follow-up as promised, this will help educate your customers that they have little or no ‘wiggle room’ and will find it easier just to pay.
- Don’t be afraid to pass the debt management to a professional.
- Timing is everything, the older the debt the harder it is to collect.
- Utilising the skills of professionals can free you up to run the business, after all, it is what you are good at!
We at Gravity Credit Management are a business that leads to a successful recovery of your debt. We understand that sometimes, you simply cannot get the traction wanted and whether small or large we are likely to have collected debts from your specific industry.
Give us a call on 0800 GRAVITY we are happy to look at the options available and make any recommendations where possible.