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Expert Strategies to Effectively Communicate with Debtors During COVID-19

As many businesses may already know, collecting debt unnecessarily possesses a negative connotation. This fear can be amplified by the climate of recent events, but there is no need for the topic to remain taboo, as long as your methodology is above reproach.




In this era where most business transactions are carried out with the use of credit, COVID-19 may delay these transactions, but agreements have still been made and services have been exchanged. In the long run, it is best practices for the economy and businesses and individuals if these agreements are fulfilled and paid off. While debt collection may not be the most enjoyable aspect of business, there is no need for the stigma, if you follow these 5 key principles that we at Tavelli Co. have held as our standard operating procedure for nearly 40 years.


First and foremost, check in on your receivables. There is no need to worry about negative backlash, as long as your method is thoughtful and considerate. No one should fault a business, that they received services from, for politely and respectfully asking them to pay. The detriment should only apply if a business treats their customers poorly. Reaching out is the first step and as long as you are considerate of your customer’s circumstances, then the interaction should follow the age old saying of, “the worst they can say is ‘no', or 'not right now.'" While many may understandably ask for more time, checking in will inevitably improve your cash flow as there may be some who are able to afford to pay in full right now. Some may need work outs! While everyone is affected in some way, remember that this also includes your business and your employees who rely on you. Bills still need to be paid and a proactive yet graceful approach increases returns in a win-win situation.

The key, and second, principle is an empathetic demeanor. If you are willing to work with your customers in these circumstances, they may be far more inclined to want to work with you. These are challenging times for everyone so demonstrating that you care and understand that each person’s situation is unique can only improve relations. What many may be struggling with right now is the fact that they have debt, so you can do your part to learn their situation and help them come up with a plan to pay it off. This not only helps you receive payment; it also helps take a burden off of them and avoid having to be reported to credit.

It is important to set realistic expectations for repayment. There is nothing wrong with asking for payment in full, as long as you are sensitive to individual circumstances and have the ability to listen and bring solutions. At bare minimum, this is vital to set the bar for those who may want to take advantage of these circumstances to avoid prior agreements and transactions they have made. What you can afford is time. It is better to receive payment in full, over time than not at all. If your customer cannot pay entirely up front, you are better off asking them how much they are short. This can be an effective phrase to collect partial payment and create realistic resolutions. Communicate and agree to a solution that works for both of you. People are significantly more inclined to partake in a plan that they helped co-author, it is human nature.

A crucial, yet maybe overlooked, step is documentation. Take notes or summarize the conversation you have with an individual. Record it somewhere that it can easily be accessed at a later date for any follow up conversations. While your business serves many customers, these clients only interact with one business in the dynamic of this relationship. It can be frustrating for a customer if they have to explain their situation each time they talk with someone from your company. Proper documentation will also keep the terms of the renegotiation on track. Meanwhile, you may have different employees contacting and working with individuals. The obscurity can easily be minimized if there is a shared database that your employees can reference before calling a debtor. Think of your business front as a single individual, you want your debtors to feel known and cared for in their relationship with this entity, your business. If they feel noticed and remembered (even though it may be different individuals calling them) it will make reviewing a plan and staying on the same page far easier. This also prevents miscommunication and changes in the plan from being made by a single party.


The final step is to finalize and recap the agreements made by following up with your customers. Not only does this add a simple and effective layer of accountability, but circumstances change. This allows you to adapt payment arrangements. Both to extend time if needed, or maybe to finalize a payment that the debtor realized they can pay sooner than expected. Remaining consistent and communicating effectively is key here. Set clear follow-up dates that work for both parties involved and make sure to follow through on them. This allows the debtor to feel that you are working with them and allows you to collect at the earliest convenience since there may be unexpected times in which they can pay in full, but would otherwise not be prompted to.

In summary, there are five key principles that we, at Tavelli Co., Inc., follow:

  1. Check in on receivables

  2. Be empathetic towards individual situations

  3. Set realistic expectations for repayment in full

  4. Document everything

  5. Follow up consistently with clear expectations


It is always important to continuously reevaluate your client’s ability to pay. In light of current events, this aspect is all the more imperative as some clients that did not normally struggle, may have problems now. You can still acknowledge the difference between someone who usually pays on time and someone who does not regardless of the COVID-19 events. Overall, a good principle to keep in mind is to rephrase the goal at hand. Rather than merely "collecting debt," a compassionate company will make it a goal to "work with clients to help them pay." This places value on relationships with your customers rather than treating them as one time debtors.


If you are still struggling to collect your money or communication breaks down over time, reach out to the experts and we can help with a plan. We offer first-party and third-party accounts receivable and collection services, as well as private consultation.



Tavelli Co., Inc. has over 37 years of unparalleled experience in the debt collection and receivables management industry. Our mission is to achieve the right balance between getting clients paid and being empathetic to debtor circumstances, through implementing innovative practices, hiring experienced people, and improving business decisions through analytics. We provide peace of mind to all involved by collecting money with no complaints. Tavelli Co., Inc. takes the time to carefully listen to your customers and share their feedback with you through meaningful data and transparent communication, so you have access to the information you need to make quality decisions and improve your processes in the future. Contact us today and let the debt collection experts at Tavelli Co., Inc. help you set your business up for success.


IMPORTANT: Information provided by Tavelli Co., Inc., any employees of Tavelli Co., Inc., or its subsidiaries is not intended as legal advice and may not be used as legal advice. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.

Address

Tavelli Co., Inc.

3700 Montgomery Drive
Santa Rosa, CA 95405

Contact

Office Hours: Monday-Friday 8-5 PST

Email: info@tavellico.com
Tel: (707) 509-5565

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