South Africa is now officially in its first recession since 2009 after gross domestic product (GDP) shrank by 0.7% in the first quarter of the 2017. With consumers owing around 75% of their monthly pay to creditors, your business is not the only one that needs to reduce its debt book by tracing debtors.
Stats show that both trade and manufacturing industries have recorded negative growth rates as well as consumer sectors such as wholesale, retail and accommodation. Recession has happened in the past and is a reality of the future. The question is; how do you manage your business through it? Unpaid invoices hurt your cash flow, limiting business growth and potential investments. What debt collection practices can you adopt when your customers are avoiding you? Here are our top tips on how to make contact with overdue customers to maximise debt recovery while protecting your brand throughout the process.
Tip 1: Maintain good relationships
Keeping track of your customers is key – especially those who have outstanding debts. Regular contact and maintaining a good relationship from the beginning will increase the likelihood of your customers paying their debts on time. Don’t just issue out invoices and hope for payment – contact them by phone and ask cheerfully if your invoice was received. This way you can validate that their contact details are still accurate and updated. If your business doesn’t have the manpower to continuously follow up by phone, you might want to consider outsourcing a call centre solution
Tip 2: Be resourceful
Sometimes you need to put your investigator glasses on. Find your debtor over social media channels such as Facebook, Twitter, Linkedin, Instagram and more. Use the data resources you have at your disposal like Google. Work smart. Social sites and listings of online profiles help you seek out the demographics of potential defaulters, plus, other information that can be used as proof when making that important phone call.
Tip 3: Use Debtor Tracking Technology
Tracking down an elusive debtor is the tricky part. Tracking and tracing technology has made it a lot easier. The perfect data solution for businesses is Online Trace. This debt collection tactic will supply you with the contact details of the debtors that you need to track, as well as public information that should prove useful. The more information you have, the better.
Tip 4: Update your Customer Contact Details
Always making sure you have the right customer information in crucial. Validate and update your data regularly. You will increase your debt recovery rates if you have the correct information, and save a lot of time. If you have loads of customer data, it’s easier to outsource to an expert who offers data cleaning .This technique “cleans” outdated data and returns current information on your customers or debtors.
Tip 5: Hire an expert
When you find yourself with an increasing debt book, call a professional. Especially when it comes down to early stage or pre-legal debt collection. The professionals will offer advanced debtor tracing techniques tailored for their B2B or B2C companies. If your business has a large group of unreachable debtors, then something like Batch Trace could be an ideal data solution for you. This option delivers a full spectrum of date-stamped information, on multiple customers, using a series of cross-reference procedures on public data. This is handy when tracking customers who have tried to escape debt by moving home or changing contact information.
Debt collection is a reality to every business, and doesn’t have to be a headache. Once you’ve “handed them over” to the legal team, you’ve most probably lost a customer. Nip the problem in the bud by keep track of your customers from the beginning, and us debt collection techniques that will maintain your customers and build brand loyalty.