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4 Things Debt Collectors Know That You Don’t

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4 Things Debt Collectors Know That You Don’t

By Dean Kaplan, CEO and President, The Kaplan Group

Cash flow is more important than ever. In the middle of a pandemic, very few businesses can afford to have clients owe them money. This means many businesses that used to be more laid back about collecting from late-paying clients are getting serious. As a commercial debt collector, there are things I know about the debt collection process that may surprise you.

1.Nice gets results.

There’s a stereotype of debt collectors as angry and threatening. But most successful debt collectors know that to be effective, you have to listen to people and form a relationship. Your approach to collecting from a client is highly dependent on the reason they haven’t paid. Without listening, you don’t know if a debt isn’t paid because the client is temporarily in trouble, about to go out of business, just disorganized or has a dispute. The more you can get people to talk, the more information they’ll reveal. It’s possible that the debtor will become upset or embarrassed during the conversation. But, the collector must stay calm and reasonable.

2. Debt collection starts before you sign the contract.

Having a solid credit application and laying out terms on all your contracts can make a huge difference in your debt collection. Your credit application should include complete contact information and layout any payment terms, including interest and late fees. Interest and late fees often provide good negotiation points for collection agents. I have frequently offered to waive late fees in exchange for prompt and complete payment.


Make sure that the terms on your contracts and invoices match the terms on your credit application. A reputable collection agent will want to see complete documentation of the agreement and debt. Although I try to avoid going to court, I will not accept a case if I don’t think it can be proved in court.

3. You should avoid going to court, and threatening to do so.

Speaking of court, although many people pay on debt because they’re afraid of legal action, you want to try to avoid it whenever possible. The contingency rate (the amount you pay the collector) is higher if you have to sue and the process is prolonged. This is especially true now when courts are backed up due to the pandemic. A default judgment might get issued within six months, but trial dates are now being set 18 or more months from the filing date. By that time, the customer could be out of business. Once you win a judgment in court, the money still has to be collected, which can take years in some situations. You should never threaten to take a client to court. Once you issue that threat, you have to follow through. If you threaten to sue and then hire a collection agency instead, you’ve made their job harder. Likewise, you should not threaten people via social media. Doing so can backfire and expose you to legal action.

4. Prompt debt collection can save business relationships (and time and money).

When a client owes you money, your first step should be to cease doing work or selling products to them. Unfortunately, this means your client will need to find another vendor. If you spend months or years trying to collect from them, that just gives them more time to build a relationship with another vendor. By sending the invoice to a collection agent promptly, you shorten the amount of time before you can begin working with the client again. Hiring a collection agency on a contingency basis can also save you time and money. Your staff can be focused on their regular tasks and reputable agencies have tactics for increasing pressure to get money flowing faster.

As this new year begins, you’ll want to make sure that all of your accounts are in order. Thinking about debt collection both now and in the future can keep your cash flow steady.

The Kaplan Group, a commercial collection agency specializing in large claims and international transactions. He has 35 years of manufacturing, international business leadership and customer service experience. Today, he provides business planning, training and consultation to a variety of global companies.

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Kanye West Merch

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Kanye West Merch

Kanye West is a popular rapper, musician, and clothing designer. He has many fans, who adore his music and fashion. Recently, Kanye West Merch has started selling merchandise on his website. His fans have been eagerly buying it up. The merchandise includes T-shirts, hoodies, hats, and other items. Some of the designs feature popular lyrics from Kanye’s songs. Other items feature graphics or designs that are inspired by Kanye’s music or fashion sense. So far, the feedback from fans has been positive. They love the quality of the materials used and the designs of the items. They also appreciate that they can buy merchandise that is exclusive to Kanye West Merch website. If you’re a fan of Kanye West, be sure to check out his online store for some great merch.

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