Receiving timely payments can be a struggle and can seriously impact the company’s bottom line. Andy Yavello and Matt Moskowitz of American Profit Recovery both say that utilizing a third-party collection agency can help expedite the process, but there are limitations and important factors that play into the process.
Here are a few tips they offered at Real Green’s Solutions 2019 to get you paid on time.
The legalities. The consumer financial protection bureau was designed to protect consumers. “This makes you the bad guy,” Moskowitz says. This fairly new organization set a precedent for the extent of the interest and fees you can apply to late bills. In order to legally apply fees and interest, the customer needs to have expressed consent by a signature at the time of or prior to the start of service.
Additionally, while you are able to use auto dial functions to reach late customers via their cell phones, collections agency are not permitted to.
Disputes. When your customer disputes a bill, the collections agency has to immediately stop all activity on the account until they have documentation to prove the debt is truly owed. This document includes information showing your company was there to perform your services for the specified amount. Once that information is received, the agency can move forward with efforts to get the balance owed.
Educate the customer. Before service starts, ensure the customer understands the extent of the work being done, what the cost will be – with a breakdown of each aspect – and the key factors that will play into the success of a completed project.
Spend time up front. The more work you do ahead of time, the less time you’ll spend digging through old statements to prove overdue balances.
Timing. Get your statements and invoices out properly. Invoices sent out late have a higher chance of getting disputed when it comes time to collect. Also, make sure you are consistent in your billing so that clients know when to expect them.
Consider it customer service. No one enjoys making a collections call, so Yavello suggests treating the call like an ordinary service check up. Once you follow up with the customer and ask if they were happy with their service, it’s a good time to offer to take care of their outstanding bill over the phone.