Credit-to-cash briefing:

Efficientcollection calls
Calling a customer to ask for an overdue
payment does require some skill. It can also feel
uncomfortable to chase outstanding invoices.
However a simple, informal, phone call can often
resolve issues quickly and painlessly.

Credit-to-cash briefing:

How to chase overdue payments by phone
Creating a direct connection with your customer bytalking to them can be vital during times of economic
uncertainty, such as during the COVID-19 pandemic.
For example, businesses at every stage of the supply chain havebeen impacted by the coronavirus. Perhaps your customer justneeds a few more days to sort out their cash flow before they
settle your invoice. If this is the case and you are able to support
it, you will be save yourself the trouble and costs involved withmore aggressive collection tactics such as legal proceedings.
Perhaps more importantly, you will also preserve your working
relationship with your customer and future opportunities forgrowth.
There is no one single way to make successful telephone collection
calls. Every debtor is different and what leads to a positive
outcome in one case may fail in the next. However, this is exactly
the reason why thorough preparation and a certain measure offlexibility will considerably increase your chances of success.

Areas to consider before calling a customer in arrears
Who should call the customer?
Not every employee is suited tomake an invoice-chasing telephonecall. Think about your businessstructure and how relationships areformed with your customers. Should
one of your finance team call yourcustomer’s finance department? Orwould it be more personal – andpossibly more productive – if thecustomer’s account manager calls
their contact directly? Does theperson tasked with making the callfeel equipped to do so? Consider
how to best support them throughtraining, provision of information oreven delegation to a colleague.
Create clear targets
When creating targets, it is agood idea to establish what you
hope to achieve and what you cancompromise on. For example, you
may want to achieve payment in full,
but you may be able to compromiseon the payment date and give yourcustomer extra time to pay.
If you are not able to give yourcustomer extra time, perhaps you
could work with a payment planthat means you receive part of yourpayment upfront with the remainder
spread over a series of instalments.

Preparation
Before making a collection call,take some time to look into thebackground of the debt. For example,
find out if the reason for the debt lies
with your business. Perhaps yourcustomer is in dispute over the levelor quality of the goods or services, ormaybe your sales team has made apromise concerning payment terms
that you were unaware of.

want to work with you to resolve
the issue? Are they bigger thanyour company and used to taking
advantage of smaller businesses?

Check if there’s a problem that’s
prevented payment. Find out
what you can do to resolve it. Yourcustomer may have been withholding
payment because there wassomething wrong with your invoice.

 Name and contact details of who

Before making the call check: Did the invoice include everything

it should have?

 Was it addressed to the correct

person or department?

 Was it received?
 Does your customer’s accounts

department need additionalinformation before they canprocess your invoice?

Consider the different ways yourcustomer could respond to your call.
Will they make excuses, or will they

It can be helpful to work out what
common excuses are and how you
wish to respond to them.
Create a customer file withinformation that includes:
to call Payment record history
 Past experiences with reminder

notices and collection calls,including any previous reasons forlate payments

Credit-to-cash briefing:

How to chase overdue payments by phone
Making an overdue invoice call

Reflect
Spending a bit of time assessing
your actions will help you achievea continuous improvement of yourcollection results. The following
questions may help your reflection:

Call your contact’s direct line or ask
for them by name Be polite and upbeat, give thecall a personal touch but remain
focused, firm and assertive

 Did I display a positive attitude

in order to guarantee an optimal
telephone call and did I strike theright tone?

 Get straight to the point and beclear and open about your wishes Be compassionate. Remember

there may be many reasons yourcustomer has not paid and someof them may be the fault of yourbusiness. A warm and strong
relationship moving forward may
also be more valuable to yourbusiness than one that ended overa misunderstanding or a disputethat could have been amicably
solved If your customer has a historyof late payments or refuses to
pay what they owe it can help totell them the next steps you areconsidering to take. These may
include: Charging interest on every day
spent overdue Withholding supply of current
and future goods or services
 Removing credit terms Instructing a collections agency
 Taking legal action

 Make notes throughout your calland summarise the key actions
at the end of the call to confirm
that both you and your customer
understand and agree. Who will dowhat by which deadline?

 Follow-up your call immediately

with an email that summarises
the main points discussed and any
agreed steps.

 Did I always remain focused on

the primary objective?

What to do after making acollections call
Documentation
Make sure your notes are stored onyour customer’s file. Documentation
within the system is extremely
important, as it allows a colleague,collections agency or legal
representative to pursue the case infuture.
Keep your word
If you settle on a due date, make surethat it is kept. Likewise if you agree
on consequences for failure to pay
by an agreed date, you will need tofollow through.
Be persistent
You may need to contact your debtor
more than once. Be prepared to doso. It can help to set up a schedule.
For example, get in touch once yourinvoice becomes one or two days
overdue. Do so again at regularintervals, say every five to sevendays, until the debt is 30 days past
the due date. At that point you may
need to escalate – or at least threaten
to escalate – to professional or legalaction.

 Did I accept hopeless promises?
 Did I receive precise answers tomy questions?

 Did I mention the positive aspects?
 Did I manage to limit the phone

call to an adequate period?

 Am I happy with my line ofargumentation or can something
be improved?

What to do if your collections
calls failIf you have been unable to secure
payment or an instalment plan for an
outstanding invoice, you may benefit
from some specialist advice. You
may be able to negotiate a solution
with a mediator, or you may need tomake a court claim for the money.
A professional collections agency
can also be very helpful. Sometimes
simply contact from a collections
agency is all that is needed for a later
payer to act. If your debtor is abroad,you may also benefit from an agency
that has offices, languages andexpertise in the same country as yourdebtor.

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Disclaimer
This publication is provided for information purposes only and is not intended as a recommen¬dation oradvice as to particular transactions, investments or strategies in any way to any reader. Readers must
make their own independent decisions, commercial or otherwise, regarding the information provided.
While we have made every attempt to ensure that the information contained in this publication has
been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for theresults obtained from the use of this information. All information in this publication is provided ’as is’,with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, andwithout warranty of any kind, express or implied. In no event will Atradius, its related partnerships
or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any
decision made or action taken in reliance on the information in this publication, or for any consequential,
special or similar damages, even if advised of the possibility of such damages.

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