How to Overcome Rebuttals in Collections

Overcoming customer rebuttals leaves you with more available cash for your business.
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Collecting debts is rarely fun, but serves as an essential part of business operations. An unpaid debt impairs your company's cash flow, reduces the bottom line and wastes resources on the collection process that could have been spent elsewhere. Moving unpaid invoices from the collection bin to your business bank account requires skill in overcoming rebuttals for those unwilling to pay.


Proof of Debt

One common rebuttal tactic for customers involves denying that the original debt exists, particularly if it was incurred months or years ago or if your business has changed its name or management since that time. Before making the first collections phone call, get as much proof of the debt as you can, including credit agreements and the date the items were purchased. If you have the original payment agreement with the customer signature, that can curtail these rebuttals in a hurry.

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Detailed Information

Customers who acknowledge the debt but are unwilling to pay may ask additional questions in hopes that you can't answer right away, or claim that payment has already been made. Avoid this trap by keeping the information at your fingertips. If they claim this is the first they've heard about the debt, have information about previous letters, calls or other attempts to collect it. If they say they made a payment a month ago, note the precise records of any payment actually received, including check numbers and dates when applicable.


Request Commitments

If a customer says he can't pay right away, offer options that require him to commit to a payment plan. You might offer to reduce some of the added fees if the customer pays electronically, or if you receive payment within seven business days. A 10 percent discount for prompt payment may be hard to swallow, but it's also better than the alternative if it leads to an immediate payment and ends the collection process. Don't accept "I can't pay you now, but I'll mail a check next week." Ask for the date they plan to mail the check. Depending on how delayed the payment is, follow up beforehand to remind the customer of their promise and afterward to make sure payment has been made. If a business customer blames a new accounting system or logistical challenges, offer to pick up the payment to show how serious you are about collecting it.



Reveal Next Steps

Threatening customers is illegal, according to the Fair Debt Collection Practices Act. If you suggest customers will go to jail or lose their job if they don't pay, or if you say you'll post their bad debts on their friends' Facebook pages, you place yourself in legal jeopardy. However, you certainly can reveal the options that may follow if the invoice is not paid, which could include small-claims court, civil suits or other legal measures to win the money you are owed. While there are no debtors' prisons in the United States, the threat of being taken to court and risking a civil judgment may be enough to get some to stop their rebuttals and write the check.



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