The irresolute nature of today's economy is causing consumers to literally tighten their belts by purchasing less, consuming less and eating out less. Those in the waste and recycling industries are feeling the effects of this conservative behavior with a decline in the amount of trash generated from residents and businesses. Even though the amounts may be significantly reduced, consumers still have trash to be picked up, which makes it possible for most waste companies to endure. But simply getting by during the economic slump is not enough for most companies, which have fleets and equipment to maintain.
A few waste and recycling firms have taken a proactive approach to modifying their internal accounts receivables practices and have experienced positive results. A few key steps can assure overdue accounts are handled in a way that helps maintain customer relations. This ensures a strong customer base that will keep business thriving.
Intervene early. When following up with overdue accounts, it is best to act as early as 30 days past due. Many businesses hesitate to get aggressive when pursuing overdue accounts, as they fear it will alienate customers. However, in tight economic times, many consumers struggle to prioritize their bills and make tough choices regarding what should be paid first. By acting early, your invoice has a better chance of being placed at the top of the heap. Customers who are overwhelmed by their finances need a little help deciding what should be paid first. An invoice sent early provides the gentle nudge most need to help organize their monthly bills.
Use a mail-based campaign. Waste and recycling businesses who conduct a respectful mail-based campaign have experienced greater success resolving past due accounts. Notices sent in the mail are less threatening to most consumers than phone calls. A tangible reminder to resolve an overdue balance typically generates a positive result, as consumers appreciate feeling that they are working with a company that is diplomatic and sensitive to their financial situation.
Prepare a second act. When requests for payments are ignored, businesses may need to adopt a more aggressive approach to achieve results. Developing a respectful plan sends a message to customers that your company is serious about resolving their overdue account. A tactful follow-up approach oftentimes provides the incentive consumers need to pay their bills without making them feel they are being forcefully pursued. This method also helps preserve long-term customer relations.
Consider hiring a collection agency. There are times when your firm may require help from an outside source. Many small waste and recycling businesses simply do not have the staff or the resources to effectively pursue overdue accounts. A collection agency can increase your company's success in retrieving overdue funds and will put in place methods and procedures to ensure steady payments.
Know what to look for in a collection agency. A reputable collection agency will follow a proven business model that retains your customers and has your company's best interests in mind. They should work as a team with your team and achieve success only through your success. An effective collection agency will increase your waste and recycling businesses' profitability with rapid recovery and a high resolution rate. They should maintain and even strengthen your customer base by treating consumers with dignity and respect.
Other factors to consider when looking for a collection agency:
- Do they use a flat-fee system? A flat-fee system makes it affordable for small waste and recycling firms to hire a collection agency. By charging a low, one-time fee, regardless of the dollar amount of debt, businesses can afford to seek help with particularly stubborn overdue accounts.
- Does the agency employ customer-driven technology? Turning an account over to a collection agency can be a daunting prospect. Customer-driven technology allows firms to manage their overdue accounts online, in real-time, and speeds up the recovery process. It also keeps businesses from feeling they are relinquishing their accounts by giving them ongoing access to those accounts.
A few internal changes to your businesses accounts receivables can benefit your firm in any economy. The methods mentioned above can help boost your bottom line, strengthen your financial future, maintain good customer relations and keep your reputation flourishing in the community. Adding a collection agency can help provide the extra assistance your business needs to stay strong in an uncertain economy while also helping you to free up staff time and to maintain good relationships with your customers.
Matt Moskowitz is one of five partners of Marlborough, Mass.-based American Profit Recovery Inc., a collection agency with offices in Massachusetts, Michigan, North Carolina and Kentucky. He can be reached at [email protected] or 877-634-8900.