One of the most essential pillars of good business is relationships. Forming and maintaining good relationships could make the difference between a thriving business and one that struggles in its day to day operation. These relations must be taken into consideration as you go about your interactions with those that you have ties with. You must keep in mind that not all encounters will occur while everything is running smoothly and all is right. This is where the real test of your relationships will occur.
Debt recovery presents a particular challenge when it comes to client interactions. Your approach to the situation counts as missteps can lead to burnt bridges and soured relationships. Establishing a proper strategy that will act as guide throughout the process could be the key to retaining a vital relationship. First, you must understand what debt recovery entails so that you can make informed choices as you lay out a strategy.
What is the Debt Recovery Process?
Debt recovery describes the course taken by an entity to recover funds that are owed and have yet gone unpaid. It begins once the creditor, or the one that is owed, brings in a third party-usually a debt collection service- to take steps to have the debtor, the one that owes, render payment to clear the debt.
The process of recovering or collecting debt from those that owe can vary from company to company and even client to client. However, the process typically entails:
Information gathering: it is advised that the collector be as familiar with the debt and the circumstances surrounding it as possible. This can inform their approach strategies while ensuring that the collection process is entirely legal and justified.
- Initial contact: the collector will attempt to get in touch with the debtor. If they are successful, then discussion regarding the debt will ensue.
- Second attempt: If the first attempt to reach the debtor was unsuccessful, the collector will try to make use of other communication channels that were not utilised in the first place.
- Other attempts: Unsuccessful; first and second attempts necessitate the need for further inquiry as the collectors continue to make the effort to reach the debtor to establish a settlement plan.
- Legal route: If the collector is entirely unable to reach the debtor, after informing the creditor, the debt recovery case will, at this point, be escalated into the legal system which will review the situation and provide guidance and judgements on what can be done next.
Client Relations and Debt recovery
Throughout the debt recovery process, from the time it is recognised that something is owed that is yet unpaid, the interactions that occur between all the parties involved count. Negative interactions will have just as much, if not more, impact as positive ones. Maintaining positive client relations during the debt recovery process is imperative as it:
- Helps to certify that the relationship with your client does not break down in the interim, thus losing you what could be a valued customer.
- Helps you avoid a scenario where dissatisfied clients spread word of their negative experience by giving bad reviews of your company. His can drive away new and existing business.
- Solidifies the positive reputation of your company. If a client goes through the debt recovery process without feeling as though they have been mistreated, then your company’s reputation will remain intact. It may even improve in some cases.
- Certifies the retention of your client base. If your clients are unhappy, they will cease to do business with you and will most likely go to those that you compete with instead. This can be a black mark on your business.
Avoid gaffes that may damage positive client relations during debt recovery by using an intermediary in the form of a debt collection service. These services come with the benefit of experience in the recovery process so that you do not have to make guesses on how to go about the procedure, thus opening yourself up to costly mistakes and unwanted outcomes. Calling upon a debt collector has many benefits. The right debt collection service will bring firm professionalism to the table, and as they go about their mandate, will approach the matter at hand using only best practices. By allowing you to limit your interaction with the client, they will provide a buffer that will enable you and your client to go through the sometimes uncomfortable process and emerge relatively unscathed on the other side. Contact your local service provider for more advice on the same.