There is a 'window' - a short period of time - when a fresh approach by another member of your staff could recover a much overdue account in a matter of days: be this after 30, 40, 50 days etc.
If your approach is planned, with defined objectives, you should be able to make the customer 'an offer they cannot refuse!'
After much pressure from your credit control – be that from as few as 40 days – the customer knows there is a time to pay or accept the consequences of their inactivity.
At this stage, and only if the customer is convinced you 'mean business', that 'window' opens. If you apply the correct strategy ‘now’ you will have your best opportunity to reach an agreement that both parties can accept.
You need to extract a 'frank and honest' appraisal of the customer's situation. There is no secret as to how to do this: just say "if you tell me why you can't pay me, I’ll try to find a solution."
You should not leave it to the customer to do all the talking. When the customer has finished explaining the problem you need to evaluate the information and provide a solution that best utilizes the customers situation.
Your evaluation and offer should also be geared to your own financial and resource position. If you decide you are in a good financial and resource position, and principal is an issue, then your strategy can be 'all or nothing' as well as it could be very understanding and accommodating to the customer. However, if principal stands alone, you should choose wisely whom you give little option to.
You may well decide that if the customer does not pay you the full amount within 24 hours you will request your credit control/solicitor to issue the customer with a summons without further delay. You may say this to a customer who you believe 'can, but won't pay' or you believe that the customer is not taking you as seriously as some other creditors who you have heard are getting paid (because they had taken strong action).
If you decide to reach agreement 'at all cost', you need to ensure that by your actions the customer does not interpret your stance as a weakness, which will harm an already difficult situation. You must inform the customer, "that you are not prepared to negotiate further, that enough time and money has been wasted, and that if they do not accept your final offer you will pursue the matter until you obtain the full amount outstanding, damages and costs." If this is put across in a professional manner, with a small amount of emotion, it is usually received as a last opportunity to secure a payment plan, without cost.
