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The time factor, key of debt collection?

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What is the link between effectiveness of debt collection and the timeline of actions taken? Is time management a key factor of success for the collector?

temps et recouvrement de créancesIn strategy, the control of the time space is paramount whatever the domain to which it applies. Whether in military or commercial strategy, the effectiveness of the actions undertaken depends fundamentally on when they are carried out.

The military art of the great captains is based on their ability to apply force to a selected location and at a specific time that unbalance the opponent and makes the victory despite a numerical disadvantage.

Some battles gained or lost simply because one of the protagonists reached a strategic location moments before the other. Ulm, one of the most famous battles of Napoleon was won almost without a single shot simply because the French troops were moving faster than the Austrian troops and were able to perform a decisive encirclement maneuver.

In marketing and sales strategy, success comes from the creation of an offer that matches the different aspects of the marketing mix (price, product, advertising, distribution) to the market need at a given moment, before the competitors are positioned.

In some sectors such as telephony, progress is so rapid that a delay of a few months on the development of a project promised to a great success makes it totally obsolete and unsaleable. Conversely, we all remember innovative products that came out too early, that is, before the demand is actually established, and that have experienced a flop.

Time is a key factor in the success of any action. This is precisely the case with regard to debt collection actions..

To get paid, chase up on due time!

First, because in addition to the realities described above, the customer dunning is intrinsically linked to time. The object of the debt recovery is to obtain payment of the invoices on their contractual due date, which occurs after the payment period applied to an invoice compared to its date of issue.

Secondly, because in order to achieve the objective of getting paid on the due date, the first dunning actions must be carried out before that date. If this is not the case, the objective can only be reached by chance, which is not satisfactory.

Finally, in order to be effective, reminders must be linked in a precise and dynamic manner. A collector who, after an action, grants two more days to his contact to obtain the validation of the payment must announce to him that he will recall him after this delay of 2 days and he must do so precisely at the indicated time .

In doing so, he gives an information to his interlocutor about the seriousness of his follow-up. If the recall takes place a week later, the information sent to the client is a lax in the management of reminders and may not rush to honor its commitment in the future.

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Debt collection efficiency

Performance in debt collection is the mirror of what is put into it in terms of demand and respect for the recovery agenda.

When the invoice is not paid on time, a raise the next day goes in the right direction. Wait two weeks and your buyer understands that he can wait at least two more weeks.

Whatever you do, or not, in recovery, you educate your clients. Be flexible and lax and educate them to pay you late; Be professional and accurate in the timing of raises and educate those same customers to pay your bills on time!

If the sequence of dunning actions is to be carried out in a precise timing, the choice of the intended interlocutor must, like the place of attack intended to destabilize the adversary in military strategy, be judiciously chosen.

Indeed, nothing is less effective than an actionl carried out towards an interlocutor who is not the right one. Sweeping in the water, sterile and ineffective action, and even detrimental to customer relations are all symptoms that can lead to criticize some debt collection departments, who consider their job to be a quantitative suite of tasks.

The search for the right interlocutor is a prerequisite for any effective action. The understanding of the internal process of validation and payment of supplier invoices shall also be understood. The greater the size of the client, the greater this understanding, and the adjustment of recovery actions accordingly is key for getting paid.

The application of a collection scenario is also essential in order to have a progressivity in the actions taken, from the pre-chase action done before due date (very soft) and then post-maturity (increasingly firm), to result in pre-litigation (Sending a formal notice) and then to litigation.

The amicable phase is limited in time. Do not stand at the same stage of collection for months!

Debt collection is a difficult art, which explains differences in performance between two collectors ranging from -5 to +10. Why -5 and not 0 as a starting point? Because this activity can have negative results on both payments and customer relations if it is badly made.

On the other hand, a timely, serious, demanding, made with a neutral tone (an iron hand in a velvet glove) helps to reinforce the seller's credibility, greatly improve cash flow and create an healthy commercial relationship profitable for both parties.

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Last comments

Very interesting article!
From :Daniel /
100 % correct but the problem is to convince the creditor to act quickly
From :Vonfelt Georges /

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Really a good work.