No matter what steps a company takes to minimize its credit risks, some amount of delinquent receivables is inevitable. Yet, many companies are not equipped, trained or staffed to effectively handle past-due accounts prior to charge-off. This can present problems since it is well documented that the average past-due account depreciates rapidly unless effective communication is maintained between you and the delinquent customer. This is where Active TeleSource’s extensive experience in proactive Early Intervention can play an important role in your active account receivable management.
Typically, a past-due account is sent a notice after 30 to 45 days stating that payment is due immediately. Then you "wait and see" if the payment arrives or the customer takes the initiative to contact you for payment arrangements or to discuss the account. This process can easily take an additional 30 to 40 days, thus reducing the probability of positive resolution on the account and customer retention.
In contrast, early intervention telephone contacts are made at the same 30 to 45 day period but, the response and information gathering is immediate. Early contact provides an opportunity to assess the customer’s situation before an additional billing cycle goes by. Your company can gain valuable information such as change of address, improper billing, disputes, skips, and customer feedback. Due to effectiveness of a telephone call, delinquent account balances and problem accounts will be reduced with this approach.
These initial calls are made in a seamless, sensitive, customer care manner in the name of your company and not a "collection agency" type call – your company has total control over what we say and how we say it. The objectives are to bring the account current while promoting customer retention and loyalty.
Increase your customer retention by 5%, and you could increase your profits 25% to 100%.