How do I define a Collection Policy for my company?

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If your company grants credit, you have probably had or will have to deal with defaults. At any time, a customer may stop paying their debts, whether due to temporary difficulties or not.



Every business needs to establish a Collection Policy, that is, a rcs database of actions, deadlines and forms of communication with the defaulting customer, seeking to motivate them to regularize their financial debt.



Below, we present some tips to improve your collection strategy – even more important in times of economic instability. Enjoy reading!






What is the Billing Policy?


The Collection Policy establishes which actions will be taken by your company's financial department in the post-sale period. In this process, there are two main objectives: to contact your customer and to ensure payment of the credit granted as soon as possible.







How to define a collection strategy?


Every collection strategy begins with a “Collection Ruler”, that is, with a sequence of actions and contacts that will motivate the customer to pay off their debt.



For example, you can send a reminder to your customer about 2 days before the due date. In the following days, after the due date, we recommend contacting them by email or phone. The idea at this point is to remind them of their financial commitment.



Between 5 and 10 days after the due date, we recommend sending the customer a Debit Notice , delivered to the debtor via SMS, email or letter sent to their address. They will have up to 10 days to regularize the situation, otherwise their CPF or CNPJ will be effectively blacklisted in the credit bureaus.





Want to learn more about the Negative Registration of Defaulters? Click here and check out our series of content on the subject!




However, if the customer still does not pay the balance due, you can send an extrajudicial collection notice. Known as a NEJ Letter, the document informs the defaulting customer of the creditor's interest in starting a negotiation process without judicial interference.



There are currently three most common types of extrajudicial notification: light, moderate and heavy. Each one has a more or less incisive tone and is indicated for different cases.



Read more: “ Extrajudicial collection notice: how NEJ Letters work ”






Define the forms of communication


Email, SMS, phone or letter? Each of these channels is a different work tool and should be used at specific times. To maintain your relationship with your customers, study your audience. Understand how they would like to be approached and always be objective.