It Pays To Be Nice – Literally

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It Pays To Be Nice – Literally

I’ll be blunt, if you don’t mind. Extremely so.

I don’t like chasing overdue accounts!

And, most people are like me. The account collection system we have developed came about out of necessity because I don’t like phoning people about overdue accounts unless I absolutely, positively have to, and I learnt very quickly, that if you make the whole matter of account collections into a system, you can reduce the number of times that you have to – a lot!

To explain.
In 1977 I worked for a finance company. One of my first roles there was to phone and ‘chase’ any customers who had badly overdue accounts. I was literally thrown into the deep end of collections. My instructions were very simple.
“Tell ‘em that if they don’t pay,
you’ll repossess their car!
That’ll put the fear of God into things.”
It did. But with one difference. The fear of God was put into the wrong entity. Me!! And I was the Good Guy. Although I’m over six feet tall, I didn’t relish asking someone to pay an overdue account, or telling them that I was going to take their car away from them if they didn’t. I didn’t know how to tell people that. And, anyway, aggressive behaviour and confrontation just isn’t my style.
Repossessions aren’t much fun either. Going to someone’s house after hours. Knocking on their front door while they’re having dinner with their family and watching the evening news on TV. And then telling them that you’re there to take their car. Fun? Nope, I think not.
But, like most things in life, it can be done nicely. Or, not nicely. I quickly found that
by being polite, understanding and tactful,
people were never aggressive towards me.
Maybe it was my height. But, I don’t think so. I firmly believe that by showing them some respect as people, demonstrating that the repossession wasn’t pleasant for either of us, they returned the courtesy.
Some associates of mine weren’t as polite.
  • But it was they who were verbally abused by the car owners.
  • It was they who the dogs were set on.
  • It was they who sometimes got into fist fights with debtors.
Call it self-preservation or woosy if you wish, but I’m here to tell you that not only is being polite a much nicer way of going about the business of getting your accounts paid, it’s much more effective.
It pays (quite literally) to be nice.
But you also have to have a system.
In the mid 1980’s I went to work for a major accounting firm. My brief there was to get the firm’s clients to pay their fees more promptly but, under no circumstances, to upset any of the clients and risk losing their valuable future business. The theory was that my “collection” experience could be put to good use to follow up the firms’ clients with overdue accounts. But what a difference. They had no working system in place at all!
Whereas the finance companies I had worked in had been systematic and tough in their approach with little regard to customer goodwill, my new employers had no system to fall back on and were overly “soft” in their approach to any clients with an overdue account. It quickly became obvious that the ideal way to manage overdue accounts lay somewhere between these two extremes.
So, I developed a very simple, non-confrontational system, based on finance company methods, to achieve my goals. After only 3 months, word started to spread through the professions about the incredible results that this very simple system was achieving. Our clients were paying their fees much more quickly. They even complimented the partners from my employers firm about the way that they were “chased” for payment.
The impossible had been achieved
… the money was coming in faster
… and the clients were happy!
Life was good. I was the hero. but it was the system really, I just didn’t know it at the time.
… and then, my eyes were REALLY opened.
In 1986 I walked through the front doors of a small Catholic School. This was to be my first experience collecting school fees. They were experiencing problems with their cashflow. Main reason? The late and non-payment of school fees by the parents. A few differences were immediately evident:
  • The school was run by the Sisters of Mercy
  • The Principal was a Nun. (Her very vocation was to help the poor.)
  • Their philosophy included caring for the poor and that No Catholic child shall go without education even if the school fees are never paid.
Some of the parents knew all this and were abusing the system. They could afford the fees but weren’t paying because they knew that the school would never “push” the issue of non-payment. The Bursar, a delightful little old lady, was completely run off her feet with 1,001 other duties as well as being in charge of the collection of school fees.
Talk about stacking the deck
…in favour of the debtors!
 
Not only that but the debts were personal debts, not business to business commitments. Much harder to collect. In schools you are asking Mr and Mrs Jones to put their hands into their back pockets to pay the school fees with money that they could be using to pay the rent or mortgage, the electricity bill or the phone. Business debts are very impersonal. Personal debts of course, by their very definition, cannot be. Anyway, the problem still had to be solved.
The school still had to pay the staff as well as paying the usual other overheads. The money had to be collected. So, I applied the same principles that I’d learnt in the finance companies and adapted for the professional firm environment. Only this time, the new system had to recognise and allow for a shortage of time, and an even gentler philosophy than that used in the professions.
Again, once we had the system in place, it only took a matter of weeks (as had happened everywhere else) before the parents started responding. Parents that had previously ignored all previous attempts to get them to pay started paying. Not only that but the school collected well over double what they usually received during the first week of the next term.
Since my first experience in that first school, I have had the privilege to consult with hundreds of businesses of all types, sizes and philosophies. Same results, every time. Less work needed by staff, no debtor upset and a much improved cashflow.
Our non-confrontational system work everywhere. It always does. Never hasn’t. But remember, as P.K. Shaw once said,
“Thoughts are useless
unless followed by action.”
Regards,
Michael Todd.

By | 2017-09-20T12:54:55+00:00 June 16th, 2010|miscellaneous|1 Comment

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.

One Comment

  1. Overdue Accounts March 10, 2011 at 2:35 pm - Reply

    Thanks for the information that you’ve shared.

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