This is a very frequent question from people who debt collect in their businesses.
Obviously, you would need to call ALL clients or customers with outstanding and due accounts. However, “Who to call 1st when debt collecting?” is a GREAT question, as there are different views and positions on this from different debt collecting professionals.
Who you call 1st really depends on the internal debt collecting system you have established and on your overall cash position in the business. Any of the below listed approaches could work for accumulating quick cash flow and are worth to remember in your business debt collecting.
- Only call the customers that will pay!
If you know your customers or clients, you know their payment patterns and you would have a pretty idea which customer would be paying you quickly when you chase them for debt. It makes sense than that you would 1st call them and get the cash flow in as soon as possible.
- Call 1st the customers with the biggest debts!
Use your time and energy wisely by targeting and calling the biggest outstanding accounts 1st. You will get greater monetary results from fewer calls and the cash flow will start rolling in larger amounts.
- Call the oldest outstanding accounts 1st!
The basic rule in debt collecting is: the more time the debt is outstanding – the less chance to collect it! So, many professionals would “attack” the oldest debts 1st for this reason and then concentrate on the “younger” debts.
- Call the already “promised payments” 1st!
Based on the premise that you do have an established basic debt collecting system in your business, you would be able to see from your previous monthly debt collecting the customers or clients that have already promised a payment. By concentrating on these customers and chasing payment from them, you are already ahead as 2nd collection call will most probably result in your debt paid quickly.
Obviously, at some stage you might use a combination of all of the above listed approaches when you choose who to contact 1st in your debt collecting. For beginners debt collectors we recommend to start by following one at the time and measure results in time and cash flow collected for few months. By analysing the results, you would be able to hand pick the group of customers you approach first that would deliver the best results.