We’ve been spending the last week reviewing our client which have outstanding debts from last year. We have let our collection efforts slip, primarily because we have enough capital to keep moving, and understand that not every company does. It’s sort of our laziness, we called grace to our customers. However a quick look back and we see about 5% of last year’s total revenue in uncollected debt.
One thing we utilized in the past which has resulted in excellent success has been to send collection notices by FedEx. There are several reasons for this. First, if you’re sending a collection letter, you’re probably going to send it certified, so you get that included. Second, you’re probably wanting your money soon, and this certainly ensures that you clients will receive the letter sooner. And finally, and perhaps most critical, is that your collection letter will be opened. Nobody ignores a package delivery. The simple fact that it is sent via a priority message will pique their interests and they’ll open it. It will be an unavoidable truth to them.
What have our results been? We’ll we haven’t sent letters out yet – that’s coming next week. But in the past we’ve seen about a 75% rate of return on these collection letters, which is extremely good. There have been several customers we have mentally written off who have ignored prior collection efforts, who shocked us when the remitted payment promptly after receiving our priority mail.
Give it a try next time and comment on your results.
