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.

Saying "No" is a positive thing in business

The ability to say "No" is a great technique that has many positive benefits in your business. Your ability to say "No" will contribute directly to your bottom line.

Some benefits of saying "No"
1. Defending yourself against paying for unnecessary services - I have let some convincing salesman get me to accept their services only to find later that the service wasn't worth it or I didn't need it. If I had said "No" to begin with I would have saved money and the time it took to cancel the service.
2. Save money on service you want - Sometime, saying "No" can lead into discounts and other favorable desperate measures. This works great for getting discounts on advertisements and some services.
3. Saves time - Many times, I want to say "No" but deferred making a decision, by saying that I'll think about it. This just opens the door for more time wasted. It's easier in the long run to say "no" right away.

Have standards and criteria for say "Yes". Here's mine criteria.
1. If it doesn't save time or money, the answer is "no".
2. If it doesn't help increase revenues, the answer is "yes".

Now, we must be careful because it's easy for some coaching program to say they will increase your revenues or some advertisement to bring in clients. You can test these out but before starting, decide on methods and measure their performance. Fire them, if they don't perform.