Before we spring up to the topic of ways one can become an awesome debt collection agent, we first need to understand the meaning of Debt Collection and the importance of this industry. When you sit at the bar and enjoy drinks with your business associates, has anyone talked about the massive debt the clients owing to their business?
What would be your reaction at that time? You can simply console him! However, if you read this article, you’ll be able to help your friend realize his debt and make a practice of your own ask well. As of 2018, the total revenue in the debt collection industry was $11.5 Billion in the US, only.
Thus, debt collection is surely a growing field and there are a lot of opportunities in the same. Another fact to back this theory will be the rise in consumer debt – an estimate stating $14 trillion approximately, in 2019.
Let’s find out various ways in which You can also join and excel in this industry:
Understanding the Job Description
The most important rule of the trade is to understand the Job requirement, first. If you don’t know what to do, how will you know how to do it?
Know who the debtor is, do thorough research about them, and try to extract maximum information, which will be beneficial for this negotiation. Remember, walking into the discussion open-minded is the best way forward!
Being a Good Listener always helps
Debt Collection is all about fancy conversations and detailed negotiations. If negotiations come into the picture, listening can be a very important tool. Understanding the debtor is a major aspect of debt collection.
Listening is one of the key factors, which helps you to understand your debtor, make conversation with them, and figure out smart replies to come out victorious from the situation!
Calmness is the way forward
Have you ever tried barking at a dog, on the streets when it is constantly barking at you? No, right! That would be very silly of you and you might end up being chased.
On a similar note, you can never afford to lose your calm, while speaking to a debtor. Even if the debtor is wrong, you need to understand that he holds the checkbook in the end, and hence, he needs to be guided to a favorable outcome. And, that can never happen if you lose your calm!
Preparation is Extremely Important
Debt Collection is no rocket science, it is just common sense and a lot of research and preparation. It’s equivalent to cooking. If you have the right ingredients, your food will taste delicious.
Similarly, while negotiating, you need to be prepared with the right set of documents. Ensure that you’re carrying the following:
- Necessary Invoices
- Transaction Documents
- Contracts and Agreements
- Payment Schedules and other documents, if any.
Flexibility is the key
You can never be rigid while imposing your terms on the debtor. It is better if you understand the client first, and then be flexible about how to go about it. Your endgame has to be a win-win situation.
If you want to get the payment out, you’ll have to sweeten the client first, before ensuring that he is all ready to listen to your conditions.
Prioritizing the Debtors
Have you ever wondered why a restaurant hires more than one chef? It is not because of the amount of food being cooked, it is about the specialty each chef belongs to. Similarly, you must know the specialty of the debtor that is the amount it owes to the client.
If there is one debtor who owes $1,000 and there is another debtor who owes $100,000 and you spend all your time wooing the first debtor, then you are losing out on a chunk of money, too! Hence, smart prioritization has to be an inbuilt exercise.
Last but not the least, consistency in following up with the clients to check up on payments and scheduling meetings at regular time intervals is an important trait of the debt collection business. If you’re not following up well, you can never extract any money out of them.
It may seem quite irritating at times, but that’s the only way to success and debt realization. Figure out a schedule when you need to connect with the debtor and stick to it.
Over to you…
With all these tricks and tips, you’re fully ready and equipped to step into the world of Debt collection and master the ways in which you can negotiate and realize payments before the stipulated time!