This is how to stop debtors stalling.
Shock. HORROR!! When you’re chasing slow payers, some of them will dispute something, anything in fact, but …. it’s only to stall paying you. They really have no problem with your account – they just want to buy time. To pay you later.One of our clients is a National Accounting Firm. This is how we will get one of their debtors to tell us what their complaint is or to “shut up and pay”.
Invoice was sent out. Not paid on time. Two Reminder Letters sent out. Phone call reminder made. Client said “fee is wrong”. Many emails, letters and phone calls made, not to get the payment but to find out what his complaint was. “I’ll email my complaints”, said the client several times. He didn’t, so … we have just sent him this letter ….
The letter sent
Dear Mr Bloggs,
According to our records, the following invoices are unpaid.
Three months ago, in a phone conversation with John Smith just before Christmas, you mentioned several concerns that you wanted addressed before you would be prepared to settle them. We have contacted you several times since then asking you to set out those concerns in bullet form either in a letter or by email so that we may look at addressing them for you.
In view of the amount involved and the serious ageing of those invoices we are now obliged to formally ask you, for a final time, to set out those concerns in writing so that we are in receipt of them by the close of business of Thursday, 02 April.
Please understand that if your account remains outstanding and we are not in receipt of your written concerns by the above date we will be obliged to revert to policy and pursue payment through other channels.
Why this will work:
1: We are writing the Bad News – See speak the good news, write the bad news
2: We are sticking to the ideal collection letter format that we looked at in bob – the builder (part 3)——- paragraph 1 – state the facts.
——- paragraph 2 – say what you want the debtor to do.——- paragraph 3 – tell the debtor what will happen if he doesn’t do as requested.
3: In paragraph 2, we gave the debtor an unusual “pay by” date. a Thursday. It infers that something will happen on Friday if he doesn’t complain or pay. Much, much stronger psychologically than “by the of the month” or “within 10 days”.
4:Fear of the unknown is being applied.——- “revert to policy” – what’s that?——- “Pursue payment through other channels” -what channels?