This is the best debt collection method to adopt if you’re like most businesses who look at their Aged Trial Balance and say “Where on Earth do I start to sort all this out?”.
If you want to collect all of your unpaid invoices, quickly, try this four-step debt collection method …
STEP ONE – Take a completely fresh look. Open a copy of your Aged Trial Balance. Take a completely fresh look at it. Become the “new broom”. Forget what’s been done before. Start all over again.
CATEGORY 1 – “The Untouchables”.
CATEGORY 2 – “For Special Consideration”.
CATEGORY 3 – “Just Due For Payment”.
CATEGORY 4 – “Long Overdue For Payment”.
These are accounts where there is more outstanding than just the current fees. (Balances may be small.)
Remember, the aim of the exercise here is to collect as many of the outstanding fees as possible with minimal work, in the shortest time, and with no client upset.)
***** “The Untouchables” – by their very definition, these accounts are NOT to be chased. Diarise to look at these again in one month.
- 1: Try and use a name that’s unfamiliar to your debtors, and, if you haven’t got someone you can use, make one up!
- 2: It works because main effort is put into where the fast money is.
- 3: This debt collection approach assumes innocence, and is very non-confrontational
- 4: The wording in the emails blames other things (the “records” and the “audit”) for following up payment
You’ll be very pleasantly surprised at the results you’ll achieve by adopting this debt collection method. Like every other post in this blog, it’s based on the Three Principles of Effective Debt Collection.