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Master the Art of Collecting Your Cash

Hate making collection calls? How to do them right.

Michelle Dunn

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Let’s face it: No one likes making collection calls. So it makes sense to try to get the most out of each call. Making collection calls is a skill you can develop. You have to be able to anticipate what the customer is going to say and be ready for anything, and you must remain in control of the call. For your call to be a success, it must always result in agreement on what is to be done.

From a business owner’s standpoint, a collection call is one more in a long list of things to do. Here are a few tips that will help you get your collection calls done quickly and
efficiently.

  • Schedule a regular time or day each week to make collection calls.
  • Have all account information on hand.
  • Leave messages, but do not reveal that the call is about an unpaid bill.
  • Get the debtor to acknowledge the debt by asking if there was a question about the charge.
  • Offer to take a credit card over the phone for payment.
  • Ask when they will pay – and wait for an answer.
  • Let them know you are documenting whatever commitment they make about a payment on their account.

You must ask questions that require specific answers when you are making collection calls. Speak with precision and make the transition from questions to a payment arrangement. Each question should be clear and to the point, with silence after each. An example:

Debtor: I can’t pay; I don’t have any money.

Collector: Are you working?

Debtor: Yes, but I just started a job and don’t get paid for two weeks.

Collector: What day will you get paid?

Debtor: Friday.

Collector:  On Saturday, you can do an EFT for R250.

This scenario can go in several directions  depending on how the debtor responds. You have to be positive, confident and compel the debtor to agree to make a payment. Once you have come to an agreement, send a confirmation letter with a payment envelope.

Then call on Friday to remind them to mail the payment the next day.

Avoid the excuses

Keep in mind that people will use a lot of excuses to avoid paying. I have had debtors tell me they did not receive the confirmation letter with the payment envelope and don’t have any envelopes themselves, so they can’t make the payment.

Be ready for anything; you will never stop hearing new and different excuses. I told this particular customer that I could send her another payment envelope but I also needed a new address so I could make sure she would receive it, and then she could make two payments when she received it.

The other option was taking a payment over the phone.

Collecting money

It’s essential to convey confidence when speaking to customers about a past-due bill or discrepancy.

Here are four tips for a confident phone voice that will help you to collect more money:

  1. Your greeting. People often make a judgement about you in the first two seconds of an interaction. It’s not what you say in that short time that matters most, but how you present yourself. A dull monotone will leave your listener with little confidence in you. Smile when you speak on the phone; it will be noticeable in your voice.
  2. Your voice. Sit up straight in your chair and picture the customer across the desk from you. Pay attention to how different your body language is. Now slump in your chair, and notice how people react to you differently.
  3. Eye contact. Since there is no eye contact when you’re on the phone, try to remain focused on the call and not on anything else going on around you. Think about how it feels when you are talking to someone who keeps looking around behind you to see what else is going on. Focus on your caller and be aware and alert.
  4. Confidence. Former California Governor Arnold Schwarzenegger is an example of someone who has an air of confidence about him. You won’t see him wringing his hands or rubbing them repeatedly through his hair, shuffling from foot to foot, or jiggling the change in his pocket. He comes across as someone who won’t cower or retreat, just as a bill collector should act.

Be ready for some emotional reactions when you make calls to past-due customers. They might be angry, embarrassed, sad, or frustrated. They might cry, swear, and yell. But keep in mind that the purpose of your call is to get the bill paid.

You can listen, let them know that you understand – even offer solutions – but get the bill paid.

Hot Tips

Getting paid faster

Five ways to ease the hassle of debt collection.

Getting customers to pay on time is one of the biggest challenges for entrepreneurs as the economic recovery drags on. And when the problem persists too long, it can ultimately shut down your small business.

Here are five tips for getting paid faster.

  1. Send invoices ASAP. It’s all too common for business owners to finish their work for a customer and neglect to submit a bill. You can’t believe how slow small business owners are at getting their invoices out, and the truth is the client has no obligation until they receive the invoice.
  2. Explain every single charge. Don’t send your customer an invoice with only a rand amount on it. Itemise everything the customer has bought or every service you provided and highlight any discounts given.
  3. Make deadlines crystal clear. Don’t allow the opportunity for any confusion. You need to tell your client when they sign the initial contract how much time they have to pay you. Also, reiterate your policy on both the billing invoice and packing slip. It needs to be there so there is no ambiguity as to when that bill should be paid.
  4. More invoices for smaller amounts. If possible, you want to avoid hitting your client with one, giant bill. A client is more likely to sit on a bill that is overwhelmingly large. Make it easier for the client to pay you. Also, by getting paid in small, frequent increments, you protect your business from losing a lot of money should your client go belly-up while they are sitting on an unpaid invoice.
  5. Make a personal connection. Send a handwritten thank you note on a fairly regular basis. The next time there is a bottleneck in the payment schedule at your client, the accountant will remember you. When they see your invoice come through, you are not just another vendor.

Michelle Dunn, author of an award winning book, columnist, one of the Top 5 Women in Collections in 2007 & 2008, one of the Top 50 Most Influential Collection Professionals of 2007 shares her hard-won expertise on debt collection with the titles in her "Collecting Money Series."

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Cash Flow

The Simple Way To Pay Wages When Your Staff Don’t Have Bank Accounts

If you have employed casual workers over the busy season, you can pay wages even if they do not have bank accounts.

Absa

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At Absa Business Banking, the things that are important to you are just as important to us. We understand your business needs, which is why we have developed tailored solutions to help you where it counts. Take CashSend Plus, for example. It is a payment solution that enables you to pay workers even if they do not have bank accounts.

Related: Hiring Your First Employee? 5 Things You Need To Know

It is safe and secure

Your employee will receive a six-digit access code and a ten-digit reference number, so that they can verify the transaction. The money is instantly available at an Absa ATM.

You can even pay yourself

We have all lost bank cards or wallets at some point in our lives. What an inconvenience. Well, it is good to know then that you can access cash by sending it to yourself. Now, that is what we call better. 

Related: How Salary Transparency Empowers Employees – And When Not To Use It

Interested?

Please speak to one of our consultants or call 0860 111 123 or visit your nearest branch.

Absa Business Banking 

Do better business. Prosper.

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Cash Flow

Entrepreneurial Balancing Acts with Debt

Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders.

Harald Merckel

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Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders. Unfortunately, many South African entrepreneurs are limited in their ability to access capital markets. Among others, the major challenges facing entrepreneurs include lack of credit history, no collateral, shaky credentials, and unformulated business plans.

Regardless, SA entrepreneurs are forging ahead and using multiple resources at their disposal such as payday loan providers, non-bank lenders, family and friends, crowdfunding and other economic empowerment initiatives to raise the necessary seed capital for investment purposes. Given the staggering unemployment rate in the country (+25%), the only way out for many people appears to be entrepreneurship. The 2008 global financial crisis threw the economy for a loop, and now the hopes and dreams of many South Africans hang in the balance.

Related: Every Tough Choice Has Management Debt – Are You Accounting For Yours?

ISM Study Sheds Light on SA Entrepreneurial Pros and Cons

An intensive study conducted by the University of Cape Town’s Unilever Institute of Strategic Marketing (ISM) found that the country is experiencing ‘a crisis of aspiration’. Simply put, many South Africans are struggling to attain their career objectives in an economy that has been ravaged by corruption, mismanagement, and scandal. Despite tough economic times, South African entrepreneurs are determined to try their luck. Pressing challenges in the form of rising unemployment, and an economy mired in failure are challenging entrepreneurs to be more inventive than ever before. The most volatile component of the economic spectrum in South Africa is the middle class.

Many South African families have lived the high life, or ascended the rungs and then been knocked down a peg. This instability is creating added volatility in a country where high crime, mismanagement and political rancour pepper the scene. For many entrepreneurs, any access to credit is a godsend. Banks and non-bank providers offering personal loans, business loans, or credit card funds invariably expose themselves to debt default. For entrepreneurs, it’s important to know where to draw the line. Access to lines of credit in a crippled economy is significantly more valuable than the equivalent access in a developed economy.

How to Know when you are Overstretched as an Entrepreneur

Debt is considered a prerequisite for investment purposes. Most South Africans simply don’t have the necessary capital to start up a high-tech venture, fund a new business, or conduct marketing and advertising activity. As such, lines of credit are increasingly being used to propel business activity among SMEs – both in the formal and the informal sector. However, once debt reaches untenable levels, the tough questions need to be asked. For example, if multiple loans and multiple payments are required monthly, revenue streams need to be evaluated against expenses to gauge whether this is a feasible status quo.

Related: How To Handle Your Post-Holiday Debt

Many entrepreneurs find it difficult to manage multiple loans simultaneously, although it is necessary to acquire the capital from multiple sources. One of the ways to deal with these types of exigencies is a single loan from a low-cost lender in the form of debt consolidation loans. Simply put, these loans are provided by bank or non-bank lenders at lower interest rates than the prevailing interest rate on other lines of credit. By taking out a debt consolidation loan, the entrepreneur has more disposable income over time by not paying the higher interest on credit card debt.

Escape Debt Before Debt Consumes You

There are several other ways to know when your personal financial situation has reached critical mass. For starters, the nature of your business may require you to continue dipping into lines of credit to maintain business operations. If you don’t have the requisite discipline to stop indebting yourself, you may not be able to get out of debt. Debt consolidation is only effective insofar as you have the necessary discipline to put an end to debt financing of all business-related activity.

Credit should be used sparingly, and profits should be generated to allow your business to prosper. In a tight economic climate, costs are the bugbear that need to be attacked. Lavish trappings are unnecessary for business functionality – modest budgets, and high-quality goods and services are far more effective than window dressing at a premium.

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Cash Flow

How South Africa’s Small Businesses Plan To Invest Their Money In 2018

Here are their five areas they should focus their attention on in the next year and beyond.

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Despite economic uncertainty, South Africa’s small businesses are positive about the future. In fact, our State of South African Small Business report reveals that 40% of small businesses are expecting to grow. However, to achieve growth without overextending their limited resources, small businesses need to invest wisely.

Here are their five areas they should focus their attention on in the next year and beyond.

Marketing

When times are tight, companies typically reduce their marketing spend. This isn’t the case for 36% of South Africa’s small businesses. These respondents recognise marketing as a critical investment area.

They’d rather make a concerted effort to grow their customer base, than sit still and do nothing as consumer demand declines.

Related: What To Consider When Investing Your (Hard-Earned) Money

Technology

Without access to the latest technology, business growth can quickly stagnate. This is why 23% of South Africa’s small businesses plan to invest in up to date equipment, whether that be new machinery, mobile devices or computers.

The right investment in this area can give a business a real competitive advantage.

It can help boost profits and improve operational efficiency – both of which can help a small business withstand difficult economic conditions with greater success.

Product development

Consumers are spoiled for choice. Their needs are constantly changing and companies can’t afford to become complacent. To keep up with market demands, 22% of small businesses plan to invest in product development. Barring a few timeless classics, most products need a regular review and tweak to stay relevant and popular.

Technology

technology-south-africa

Digitisation is transforming business functions across the board. Technologies, like cloud software can take care of laborious administrative work.

Related: How To Make Money Investing, According To Ashton Kutcher

This liberates employees from time-consuming tasks, enabling them to focus on more strategic work like customer retention and acquisition.

Technology has the power to improve productivity and efficiency. Which is why 18% of small businesses are going to focus their investment plans on this area of their businesses.

Customer service

The customer should always be the priority. It doesn’t matter how good a product is, if there are no customers, then there’s no business. As competition increases, the user experience becomes more and more important to win over customers.

Business growth depends on happy customers and to achieve that, 18% of small businesses plan to invest in delivering better service.

All five of the above business areas are worthy investment focuses. The question is, how does a small business work out what to invest where? The only way it can invest effectively is with a full view of its company finances. A small business needs to be able to see which functions have provided the best return on investment to date.

Related: 12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

It also needs to consider how much investment capital it has to spend. What’s more, before it makes an investment in say, marketing or product development, it must know exactly how and where the money needs to go.

The right software can help a small business access the real-time insights it needs to make better, faster financial decisions. To combat increased competition and market uncertainty, South Africa’s small business owners need access to up-to-the minute information from any device no matter where they are. An informed investment has the greatest chance of success.

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