As each day passes, more and more technology presents itself with the promise of making our personal and business lives easier and more efficient. But is it always the best option?
As each day passes, more and more technology presents itself with the promise of making our personal and business lives easier and more efficient. But is it always the best option?
Sure, from the pest manager’s perspective, mobile EFTPOS and accounting software systems have made financial management and reporting more efficient. However I question whether technology has made another important area of financial management – debtor control – more effective. My opinion is no; some of the old technology and methods are better than new communication advancements (such as email and SMS) when it comes to collecting money.
You must have been living under a rock not to notice how the collection of overdue accounts has been automated over last few years. I even get text messages when the account is not overdue but is due in seven days! For particularly slow-paying customers, a text message can even be scheduled to be sent to the debtor’s mobile phone every day.
I believe modern technology is not necessarily the best method of communicating with a late payer, particularly when we want to understand the details of the situation. Is there a problem with the overdue invoice? What is the reason the account customer cannot pay? A text message or email is unlikely to elicit the necessary response.
Also, it is very easy to delete an email or text message – you don’t even have to read it, just press ‘delete’. The issue with using email and text for collecting overdue accounts is the question of how long you wait to get a response (if you receive one at all). It’s also difficult to create to effectively communicate the tone of the message – that is the account is overdue and you want the payment now – via a computer or mobile phone. The aim should be to resolve the overdue issue, gain a commitment regarding payment, and retain the customer, provided they are not a perennial late payer.
So let’s take a look at the old technology and a tried and tested method for collecting overdue accounts: the telephone. I am not talking about texting here, but using one’s voice to have a conversation. What a unique idea!
Using the telephone for the purpose of collecting overdue accounts has several benefits. A conversation is efficient; issues relating to the overdue account can be fixed immediately instead of the pest manager trying to guess what the issues are or jumping to incorrect conclusions because there is no response to an email or text message. As the conversation progresses, the pest manager can question the customer as to the reasons for the delay, settle any objections and disputes, and negotiate a solution, resulting in both parties reaching an agreement regarding payment. A one-minute phone call can save endless rounds of automated messaging.
Verbal communication shows the debtor that the issue of slow payment is urgent. What is the purpose of the phone call? To notify the customer that they are operating outside of the agreed terms. Your objective is to receive the overdue funds in your bank account today. By choosing to use a personal method of communication, the customer recognises that this is a serious issue, one important enough for you to contact them directly rather than relying an automated, impersonal message.
The important thing to communicate to the customer is what your expectation is in relation to the overdue account. When do you expect payment? If the customer responds with a timeframe that is not appropriate, then say so. Always start the conversation by stating the problem and then your expectation – which is to get payment in full, today. It is important not to read from a script (you may sound you’re calling from an overseas call centre) and to just be yourself.
Sending an email or text message can be an easy and lazy way to get around obstacles people may face when asking for money, such as if they are friends with the overdue debtor or generally feel embarrassed asking for money. Ultimately, the best method of collecting money is ‘physical contact’, whether that’s meeting them in your office, hopping in the vehicle and talking to them face to face, or simply picking up the telephone.
Peter Cox, Peter M Cox & Associates
