Handling delinquency

It's a reality that every business needs to face. We all have to handle delinquency. I am luck that the number of delinquencies are fairly low but they do come up and every time seem to cause problems and wasted times.

Recently, I had to cancel my business credit card and wait for a new one because of some unauthorized usage. This caused some of my vendor accounts with automatic transactions to become delinquent. I found that one association that I was a member of had a particularly effective, hand off approach to handling delinquency. Since then, I created my own hands off system that consists of multiple e-mails, letters, and voice broadcasts.

Here's the keys to handling delinquency
1. Be nice - I wrote letters that convey a kind image and politely tell them that we realize it must have been an accident. As I get to 60 days past due, the letters are still nice but that it may effect their credit score.
2. Hit them often - If you pace it write, you should be able to hit them every five days.
3. Use as many methods as possible - Some people respond to different sources. You can use e-mail, fax, mail, and voice broadcasts. I will give a sample of our schedule.
4. Give solutions - In our case, we allow them to mail, e-mail, or stop at our front desk. You could also offer a secure website to go to pay off the deliquency.

Creating a schedule is fairly simple, we basically use the same letter for all sources. For example, we send an e-mail on day 1. Day 5, we send the same letter by mail with a membership change form. By Day 10, we do a voice broadcast reading the same letter. On day 15, the letter's tone changes slightly and the process is repeated like above.

We created this system so that we let the client know that we didn't forget and hit them enough that they take action.