Business Marketing

Top 5 best practices in collection strategy

Given administrative theory’s many concepts for collection management, we tried to simplify the top 5 best practices for managing accounts receivable.

1. Proactive strategy

To prevent delinquency problems, these are some of the activities that every business can do: from SMEs to large corporations. In all cases, this is a preventative practice, much cheaper than late payments:

A. Educate customers

Through various means of contact (mail, telephone, personal attention, etc.), it is important to inform customers about aspects such as:

  • Benefits of timely payment
  • Understanding payment schedules
  • The most accessible means of payment (among others, bank transfers, cash payments, and credit cards)
  • The costs you incur if you don’t pay on time

That’s it! All experts in collection management advise clients to know those collection fees are transferred to them, either in the form of interest or commissions for untimely payments.

b. Set a payment date that is favourable for both parties

To increase the probability of timely payment, it is recommended that the payment day coincides with the moments of most excellent liquidity for the customer.

c. Provide exemplary customer service

While it may seem obvious, this is one of the most overlooked best practices regarding charging.

Dealing with complaints and disagreements promptly is essential to prevent dissatisfied customers from retaliating by paying prematurely.

2. Promote the productivity of the collection area

Train billing staff, or people in charge of customer service, in tactics such as:

  • Arrear client argument management
  • Types of debtors and profiles of customers who are in arrears
  • Language for contact with customers
  • Negotiations
  • Knowledge of the legal basis of the collection

3. Implement incentives for billing staff

For the creditors to benefit from their proceeds, there are various types of incentives based on effective recovery according to the stage of the arrears.

 4. Establish well-defined recovery policies and processes

Every business, from freelancers to corporations, needs a clear policy for dealing with clients who are in arrears, asking questions such as:

  • When will the first contact be made, and by what means?
  • How to deal with broken promises?
  • What to do with lost customers?

In addition, it is essential to include prevention strategies, such as notification that a payment date is due.

5. Segmentation based on risk level

Finally, another best collection practice is to manage customers by segmentation.

First, it’s about designing the database so that the client’s catalogue can be managed according to their payment dates and other factors that can indicate their level of compliance and violations.

Another strategy is to design a collection score, a system for assigning points according to the client’s characteristics. Thus, this numerical value will reflect how likely the customer is to default.

And third, it can also be segmented according to the causes of delays and attitudes shown by the client. As an example:

  • Customers who are willing and able to pay
  • Clients who want and can’t pay
  • Customers who don’t like and can pay
  • Customers who don’t like and can’t pay

As a side note, As a veterinarian, you love animals, but you may not enjoy the process of collecting debts from your customers. Providing life-saving care and collecting veterinary debt are two different responsibilities, but both are important when running a vet clinic. Many veterinary practices like yours don’t have enough resources to make organizing, monitoring, and following up with customer accounts worth the effort.
You can improve your cash flow and focus on what you do best—providing care for animals—with a veterinary debt collection agency and a veterinary billing company. It would help if you had an animal collection agency that you could trust, which would help balance your finances and restore your income.

Debt collection is employed by individuals or companies to whom money is owed. They establish contact by letter or telephone, or visit debtors at home. They offer advice and suggest ways to pay what is owed. As a last resort, they sometimes have to take debtors to court for money.


Debt collection is employed by a debt collection agency or business credit department to collect money owed.

Consumer debt collections are collections from citizens who have not paid their debts, such as instalments on sales of catalogue orders by mail or credit card payments.

In the case of personal debt, the Personal Debt Collection contacts the debtor (the person who owes the obligation) in writing or by telephone to ask them to pay off the debt. In this phase, it listens to reasons for not paying and offers advice based on the debtor’s situation.

For example, it might suggest an alternative payment method. Debt Collection always tries to reach a fair and workable settlement with the debtor that is also acceptable to the creditor (the person or company to whom the money is owed). Debt Collection keeps detailed records of what was agreed upon, often using a computer database.

On-the-spot Debt Collection visits the debtor’s home if payment is not received. Debt Collection should only initiate legal proceedings as a last resort. In this phase, the creditor can use the bailiff to take over the debtor’s property or assets.

In commercial debt collection, where large amounts of money are owed, debt collectors contact the company by mail or telephone. If they don’t respond, they threaten to take legal action, and if the company still doesn’t pay, they take legal action.

Debt Collection may specialize in international matters. To do this, they can hire foreign debt collection companies and legal professionals.

Other Debt Collections specialize as tracking agents, whose job is finding missing debtors.

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