Credit Recovery: Defining a collection strategy for your company

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Does your company grant credit? If so, it has defaulting customers. No company is immune to defaulting , because at any time, a consumer can stop paying their debts. This means that every company needs a collection strategy in order to recover the amounts owed.



What is a collection strategy?

overseas chinese in australia data A collection strategy is the systematization of accounts receivable management. This methodology defines the approaches to be used when contacting a defaulting customer.



What is a collection strategy for?


The main objective of a collection strategy is to ensure that the defaulting customer pays off their debt as quickly as possible.

In fact, 51% of consumers registered with the SCPC pay what they owe within 30 days.

This is a good period of time to recover credit, because, after this period, the chances of the debtor customer “escaping” increase as time goes by.



How to define a collection strategy?


Every collection strategy starts with a ruler, that is, with a sequence of actions that will motivate the customer to pay off their debt.

In this rule, you will define deadlines and actions. In the first few days after the debt is due, we recommend contacting the customer by email or phone. At this point, the idea is to remind the customer of their financial commitment.

After 10 days, we recommend that the customer register their CPF with the SCPC. After registering, the consumer will receive a Notice Letter by mail. This letter is often accompanied by a new bill to facilitate the process.

But, if he still does not pay the outstanding balance, then you can send an extrajudicial collection notice .



Need help building your billing rule? Count on our team .



Additional tips


Build your own database


In a spreadsheet or management system, keep an updated record of your customers. Analyze the numbers, observe behaviors, and look for correlations. This information is valuable for gaining insights and improving processes.



Define the forms of communication


Email, SMS, Telephone, Letter… Each of these channels is a different work tool and must be used at specific times.

To maintain a relationship with your customers, study your audience. Understand how they would like to be approached and always be objective.

As we have already said, sending an SMS serves as a great reminder right after the bill is due. A phone call is very useful to start a dialogue and, therefore, understand what caused the default.

Keep an eye on the Consumer Protection Code (CDC) when contacting the defaulter. Attitudes that may be considered embarrassing or invasive are subject to legal action.