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The telephone is basically an immediate and flexible method of “two-way” communication which is both time saving and flexible. Do not belittle collection by telephone as it is a very important task for a credit personnel as it demands a combination of credit knowledge, communication skills and understanding of people.

Cash collection using telephone is not a one-time process. We occasionally need to call more than once. At times, even if we have closed the deal by having certain committed payment plan, we still need to call the same customer to remind him of his commitments.

There are certain cardinal rules which we should follow during a telephone collection:

• Be positive instead of taking a negative or a critical approach;
• We should give the customer the benefit of the doubt. Hence let the customer “ save face” whenever possible
• Our opening statement must get the customer’s full attention and should not be over critical or sarcastic
• We should admit any of our mistakes frankly at the outset if we or our company are, or have been, in the wrong.

It is essential that the collector should follow the basic etiquette of speaking clearly, control the volume, using the right tone and controlling the rate of the speech. Putting the mouthpiece too close and not control the volume and our tone will sound like we are shouting or intimidating the customers.

Like any follow up on credit collection, there are also three (3) stages in collection vide telephone:

1. First, we need to plan ahead of the call,
2. Secondly, we must know what we want to say during the call to make it very effective,
3. Subsequently, we still need to follow-up again.

Stage 1: Planning the call

Before the call, we must plan ahead to understand the following:

• Is our company at fault?
• Have there been any previous collection “steps”?
• What is the past payment trend?
• Who is the right person to talk to?
• In the event of partial settlement, what sort of payment plan could we agree to?
• We need to do our homework to search for fact-finding questions so as to be able to retain the initiative and keep control of the conversation,
• We need to prepare an opening statement for example like identify ourself and our company, give reason for call & others

Stage 2: Making the Call

• When making the call, we must identify the person to whom we are speaking to, introduce ourselves and our company whom we are working for,
• We also need to give a reason for the call,
• We should always leave “Strategic Pauses” to allow and elicit a response,
• We should listen to response and other information offered and make notes,
• Start asking “fact-finding” questions structured to determine the real reason for non-payment,
• At an appropriate time, try to “ bridge” to a payment plan,
• Introduce the payment plan,
• Overcome any objections,
• Obtain the agreement and commitment,
• Close the call by summarizing the agreed payment plan and thank the customer.

Stage 3: Follow Up

• By recording the notes,
• Update our records,
• Take the relevant action.

In Stage 3, we need to record our progress of the collections with the customers. At times, customers might even deny certain statements said and agreed during the previous telephone conversation. Therefore, it is essential that we should keep an infallible record of what have transpired.

A typical example of a Telephone Cash Collection Follow Up Sheet to record the progress of the collections vide telephone.

Sample Telephone Cash Collection Follow Up Sheet

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