Clients and prospect always ask what are the best practices to improve internal collection efforts? At TCLG we are only interested in handling matters after “effective internal collection efforts” have failed. So what are “effective internal collection efforts “(“EICE”)?
EICE starts with a written internal collection policy. This policy includes specify action steps that address:
- Flagging past due accounts that need attention based on days past due or lack of communication or response from the debtor.
- Communicating with flagged accounts via the phone, email, fax or mail.
- Determining how many communications are sent before escalating the flagged account to possible write off or forwarding to a third party collection firm.
- Once a flagged account has been escalated to a write off or forward to third party collection firm a final decision should occur quickly because time is of the essence when it comes to collecting past due commercial accounts in today’s economic environment because businesses are here today and gone tomorrow.
One final point about internal collections has to do with who actually does the internal collections. Often times companies default collection work to an account executive or to administrative personnel. However, successful collection activity requires specialized skill sets so creditors need to make sure that the people actually doing the collection work are skilled in proper collection know-how and collection techniques rather than just delegating the task to someone who simply has some free time.
Collection Tip: In order to ensure effective internal collection efforts have a firm written internal collection policy that is adhered to and make sure internal collectors have the requisite skill sets to be as effective as possible in collecting past due amounts. When internal collection efforts has stalled write the account off or if is a viable account send it to a third party collection firm as soon as possible as time is of the essence when it comes to collecting past due commercial amounts in the current economic climate.