The 3 Do's and the 3 Don'ts
There are three things you should do before you call me to collect, and there are also three things you should never do. In a moment, I will walk you through the three steps that should resolve 90% of your collections issues. Yes, they may take a few moments; however, in the end, they are worth the time and can save you much frustration, as well.
1. Know who you are dealing with on the other side.
Take a moment to do a simple Google search if you are doing a placement. If you are doing contract or temporary staffing, spend the $15.00 to pull a commercial credit report. Also, listen to your gut. In more than half of the collections turned over to us, the client will say, “I felt like this one was going to be an issue.” I have worked with staffing professionals and recruiters; in my opinion, you should trust your gut feeling over most other resources. So, in short, do your due diligence.
2. Get your paperwork signed.
Yes, we can collect without a signed contract. But it is so much easier with a signed contract. Also, you will not be able to regain collection or attorney fees without a signed contract. A signed contract also spells out the rules in case problems arise. We can get most courts to agree with our forwarding attorney that a 25 or 30 percent fee is owed on the candidate’s estimated salary if the candidate was employed at a company for more than twelve months. We run into issues if the candidate leaves at 123 days. The signed contract should spell out what happens “if.” A signed contract is like a prenuptial agreement. It spells out the rules in case things go bad.
3. Once you have a past due debtor, give your past-due client a specific day by which to resolve the issue or to contact you with a plan to do so.
Do not send a demanding letter that says within ten days or thirty days. Ten days from what? From when you mailed the letter or from when the client read the letter? What you should say is, for example, that the client needs to have this paid or needs to contact you to work out a mutually acceptable agreement by December 10, at 5 p.m. eastern time, that the client can send the payment directly to you via FedEx, and your FedEx number is 888-444- XXXX
1. Never reduce your price to get paid.
I have had clients who have told their debtors, “You owe me $20,000. If you pay me by Thursday, I will accept $15,000 as payment in full.” In almost every such instance, the debtor will not pay; in the best-case scenario, we could collect for you without having to sue your debtor. Therefore, you should instead tell your debtors that if they want to resolve their issues, you are willing to be reasonable. Ask them to e-mail you their proposals so that you can review these propositions. This strategy puts you in a much better position.
2. Never say or write anything bad about the debtor.
I have had clients who have gotten themselves into trouble because they sent out an e-mail or contacted a third party and said that the debtor has never paid a bill in his life, is an untrustworthy person, and so on. All this does is trigger a defensive reaction in the debtor, who may or may not believe he owes you, but can begin to believe he is owed much more. The debtor will argue that your contact with the third party caused much more damage than what he owes you. Please do not give debtors the defense they need to avoid paying you.
3. Do not hold onto an account for a long time.
I receive about twenty calls a month from people who need our help. I will tell only about half of them they need our help right away. I tell the other half of the callers to contact their debtors and give them specific dates by which to pay their invoices. To determine whether an account needs to come over right now, I use the following test. If the debtor says, “I am not paying this bill because,” it does not matter what the “because” is because, from that point forward, anything you say, do, or give the debtor will be used against you. The debtor is only attempting to find support for the reason he is not going to pay you. I have yet to see a debtor ask for a copy of the signed contract so he can see how he can get the invoice paid. He is trying to find a loophole so that he legally will not have to pay the invoice. If the debtor is sixty days behind, send him a letter with a date by which he must pay the invoice. If the debtor says, “I am not paying,” call me at 800-452-5287, ext. 6578, and we will discuss your issue.