Chapter 20

Ten Common Pitfalls in Credit and Collections

In This Chapter

Taking a pragmatic approach to collections

Keeping out of legal hot water

Getting help when you need it

Dealing with the obnoxious debtor

You may not be able to avoid delinquencies, but you can avoid lapses and lost opportunities that stand in the way of effective collections. The suggestions we provide in this chapter can help you maximize the return on your collection efforts and avoid wrong turns or mistakes that waste time and opportunities.

Not Taking Preparation Seriously

What do you do when you’re getting ready for an important meeting? Whether you’re an employee meeting with the boss or the boss meeting with an important customer, you prepare. You collect available records, information, and data relevant to the meeting, and then you review it and organize it.

Do you spend that kind of time and energy when you prepare for a meeting, phone call, or court case with a debtor? If not, ask yourself why not. Consider what will happen if you don’t collect the money; think about the potential impact on your cash flow. Your collections efforts are important. Although overpreparing is almost impossible to do, underpreparing can be disastrous to both you and your company.

Not Sharpening Your Collections Skills

Practice makes perfect. Your ability to communicate, negotiate, and react meaningfully with a late-paying or nonpaying customer is a skill that you must regularly hone if you want to stay sharp and effective. ...

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