Discussion on LinkedIn:  Heavy critique of the Accounts Receivable Industry about unsavory practices was voiced in recent discussions by the World Credit Congress Group on LinkedIn.  Below is a response by Marcel Wiedenbrugge who comments as follows:

 “I think there are certainly exceptions to the rule. Two people, but not exclusively, I would like to mention are Steven Gan, who has put two wonderful videos on Youtube about debt collection in Japan and Tim Paulsen, who has a consistent but refreshing approach in how debt collection can be done more effectively (collecting the money, but keeping the relationship). After all, even in debt collection you may catch more flies with honey than with vinegar. I believe that debt collectors should be problem solvers, not the ones that cause problems. The way you put it and the articles I have read sometimes give me the impression that debt collectors seem to belong to the last category. If we want to change the perception within the industry, then we have to work on the mindset of those who run these businesses. Apart from profit, what drives the owners of DCA’s? What are their ideas about future developments of the industry? Do they think that there might be better or more effective ways and procedures to deal with debt collection or they continue the way it has always been?

In the past I have hardly dealt with debt collectors, because I always believed and still believe that through communication and relationships you can effectively solve most problems (in B2B debt issues). Again, it is a matter how you deal with it. When you have no good relationship with a customer, it can be more difficult to find out what the underlying causes of late payment are and the customer may also feel less inclined to work with you on a possible solution (a matter of priority). Furthermore, you need to have a pro-active service minded approach: that means that you have to try to put yourself in the position of the customer (debtor) and from that point of view try to help the customer to solve his temporary or less temporary problems. By helping the customer to solve his problem(s), you may not only solve you own problem(s), but you also establish a relationship of trust and maybe even commitment. Of course trust and performance go hand in hand, but when you look at debt problems from a long term customer relation perspective, this service oriented approach can be highly effective.

As long as there are still books published, that are overloaded with legal terms and procedures, I believe that there is still a long way to go. Debt collectors or DCA’s should work on their own reputation, by preaching and practicing a different view. The times I had to negotiate for some clients, I remember that in many cases I got annoyed by the way I was treated on the phone. Mind you, I was not the one owing someone money, but I was negotiating! To mention a few things that strike me as less effective in debt collection:

  • poor telephone & communication skills
  • Poor systems (feedback!!)
  • poor feedback, especially in case of complaints
  • poor complaint handling (in many cases communication literally stopped when I filed a well-documented complaint)

For the rest, debt collection should be pretty straight forward. You have legitimate claim or not. If the claim is legitimate of course the customer has to pay, but it is the way you handle the problem which determines success for all parties involved. Think in human terms, find out the reason why people pay late and then offer them support to solve the problem(s). Work with the customer, not against him/her!”   Source: Discussion on LinkedIn