The Five Components of an Effective Collection Call
And Eight Mistakes for Collectors to Avoid
Collecting commercial debts is not unlike convincing somebody to buy something, but people with that talent tend to go into sales. For most people, however, collecting B2B debts is an acquired skill. It is not a task that requires the gift of being a natural salesperson.
People do not aspire to become commercial debt collectors. Those of us who have spent our careers in credit and collections fell into the profession. Many of us went to college and got degrees in business administration or accounting or even liberal arts and science, but due to the vagaries of providence, ended up getting jobs handling credit and collections. After all, who aspires to be a bill collector?
If your company sells its goods or services on open credit terms, it is almost guaranteed that some customers will not pay on time. In many cases, your new customer credit evaluation will identify those accounts you can expect to pay late, but that is a risk businesses are often willing to take, and reasonably so. Consequently, most businesses need to designate somebody to handle the collection of past-due invoices.
It behooves that person to put some thought into what they are trying to accomplish. It’s not hard to collect a simple debt from a customer who is willing to pay, but it is foolhardy to simply charge ahead without a plan — oftentimes, the matter will involve complications.
There are five components to a collection call, and understanding each will help you improve your effectiveness as a collector. There are also a number of misconceptions and errors you should avoid.
Don’t Fall for These Traps
They’ve always been good for the money: Circumstances change, and even reliable customers can face financial difficulties. If a customer develops payment issues, you need to find out why, not assume the problem will go away on its own. Vigilance is crucial.
I know the customer, so I will be able to collect what is owed: Knowing a customer doesn’t guarantee timely payment. Executives often have long-standing relationships with some customers and assume that if they simply ask for payment, it will be forthcoming. Too frequently, the customer is not able to pay despite the relationship, and in fact may use the relationship to stall for time. Timely action is critical to recovering debts.
You have to be a great negotiator to be a good collector: Few collection calls involve complex negotiations. Most overdue balances are due to disputes, cash flow issues, or the lack of a reminder. Effective collectors focus on resolving issues and working out payment plans.
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The Collection Calling Process
Dunning notices and statements serve as useful reminders to prompt customers that a payment is due. These reminders typically encourage those customers who already intend to pay. However, when it becomes necessary to call a customer—often because the outstanding amount is significant or previous notices have been ignored—you are more likely to encounter resistance. That’s why it’s essential to approach these calls well-prepared: have all relevant information at hand, develop a clear plan of action, and stay focused on your objective. To help ensure your calls are as effective as possible, consider these five key elements:
1. Establish Communications
Hopefully, contact information for the staff members responsible for paying their employer’s (your customer’s) bills was captured during your new customer onboarding process as part of your credit application. Otherwise, sales may be able to suggest somebody with the customer to act as a starting point, your goal being to establish who handles releasing payments, and their place in your customer’s organization. This is obviously elementary, but it is critical to find out who has responsibility for approving payment, as well as the hierarchy of your customer’s approval process. A bookkeeper or AP clerk, usually your first point of contact, may process checks, but they don’t always have the authority to send them.
Once you understand how your customer’s payment process works and who is involved, you can start establishing a good rapport. When making an initial phone call, take time to both introduce yourself and find out a little about your contact. Have they been with the company long? Who do they report to? Over time, you should try to get to know the other party even better. It’s all about establishing open communications, which will make subsequent collection efforts as frictionless as possible, besides ensuring the current call goes smoothly.
2. Make Your Request
Your tone of voice plays a crucial role during a collection call. It should convey both confidence and professionalism. Remember, you are speaking with another business professional, so it’s essential to avoid any hint of anger or drama. Unless you’re dealing directly with an owner or partner, the person you’re speaking with isn’t personally responsible for the payment. Approach the situation as a problem to be solved—stay calm, composed, and firm.
If the customer doesn’t agree to pay immediately, there are several persuasive reasons you can offer to encourage payment. Emphasize the benefits of maintaining open credit terms with your company and a positive payment history on their commercial credit report (if your company reports to a credit bureau). These are gentle forms of leverage. Releasing future orders—especially if one is currently on hold—can be an even stronger motivator.
The significance of the customer-supplier relationship can also give you additional leverage when requesting payment. Be direct and clear in your communication (for example: “These three invoices totalling X amount are past due. Can you pay today?”). Then pause and allow the customer to respond. This brings us to the next important point.
3. Ask Questions and then Listen to Learn
Most payment requests and customer replies follow a routine pattern. However, a collector's expertise becomes most evident when addressing complications. When objections or challenges arise, prioritize attentive listening and authentic engagement over dismissing concerns. Paraphrase the customer’s points to verify accuracy, and approach even seemingly questionable explanations with professionalism.
Demonstrating empathy is critical when internal organizational issues contribute to payment delays. This approach fosters trust, strengthens relationships, and reveals insights for future problem-solving. Nevertheless, maintain a firm focus on securing payment. Encourage proactive resolution while emphasizing your willingness to collaborate on solutions.
Probing, open-ended questions serve to draw out a complete picture of the customer’s circumstances. Active listening is essential—each response may expose new details requiring follow-up inquiries. Be prepared to ask layered questions and engage multiple decision-makers to identify the core reason behind the delinquency. For example:
Why weren’t these past due invoices paid within terms?
Why hasn’t your boss released payment?
Why are outgoing payments so tightly controlled?
What is causing the cash-flow issue?
What’s being done to correct the situation?
4. Negotiate Objections
Many times, customers will make excuses or otherwise try to further delay payment. Collectors earn their keep by overcoming these objections. If the customer cannot pay in full, can they send you a partial payment now and the balance shortly thereafter? If they cannot pay now, when do they expect to be able to pay? If there is an invoice discrepancy, are they willing to pay the undisputed balance? If not, the collector needs to quickly generate an accurate invoice. The list goes on, and for more insights, check out the article we published about payment objections.
5. The Critical Role of Follow-Up
A collector’s work doesn’t end when the call concludes. Ensuring promised payments arrive on schedule is paramount—if they don’t, immediate follow-up is necessary. If no firm commitment was made but the customer mentioned potential future funds, revisit the issue at that later date. If the customer requires proof of delivery, promptly provide it and then reassert the payment request.
Follow-up efforts often demand as much—or more—time than the initial call, but they are essential to preserving the momentum of earlier work. Collections is a multi-step process, and persistent follow-ups drive it forward until full payment is secured.
Eight Mistakes for Collectors to Avoid
Navigating the complexities of debt collection requires a strategic approach that balances assertiveness with legal and ethical diligence. Common pitfalls—from inadequate documentation to inconsistent follow-ups—can derail even the most diligent efforts, turning recoverable debts into financial losses. Whether dealing with disputes, confidentiality breaches, or inflexible negotiation tactics, collectors must prioritize professionalism, accuracy, and adaptability to protect both revenue and client relationships. Below, we outline eight critical missteps to avoid, equipping you with actionable insights to maximize recovery.
Lack of Proof: Always provide clear documentation (e.g., invoice matching the purchase order, signed proof of delivery/service ticket). Without this, the customer can dispute the debt’s validity, delaying resolution. For example, discrepancies in dates, quantities, or pricing can lead to prolonged disputes or non-payment.
Unprofessional Conduct: Avoid threats, profanity, or aggressive behavior. Employees (not owners) often handle payments, so maintain respect. Empty threats (e.g., “We’ll sue!” without legal merit) erode credibility and may violate fair debt laws. If escalation is necessary, follow through promptly (e.g., refer to a collection agency within days, not weeks).
Breaching Confidentiality: Never discuss debts with unauthorized personnel (e.g., receptionists, colleagues). Faxes or emails sent to shared inboxes risk exposing sensitive data. Exception: Reporting late payments to credit bureaus is acceptable (and often contractual) but verify reporting policies first.
Misrepresenting Terms: Accurately state the debt amount, interest rates, and fees. Adding unauthorized charges (e.g., arbitrary late fees) violates contracts and laws like the Fair Debt Collection Practices Act (FDCPA). For example, charging 5% interest when the contract specifies 3% is illegal.
Ignoring Disputes: Pause collections if a customer disputes the debt. Request written proof (e.g., delivery discrepancies, billing errors) to validate their claim. Resuming collections without resolving the dispute risks lawsuits for harassment or unfair practices.
Being Inflexible: Avoid inflexibility with customers facing cash flow challenges, especially small businesses, which are particularly vulnerable. If a customer shows consistent effort to repay (e.g., adhering to promises or partial payments under a structured plan), you should be willing to work with them. Rigidity risks non-payment and losing the client in the long term.
Inconsistent Collection Efforts: Your collections need to be regular, systematic, and progressively aggressive.. Irregular collection efforts lack the continuity that increases the impetus for the customer to pay. Lapses in time between collection efforts only serve to age the receivable further and increase the likelihood it won’t be paid. Failure to follow up on a customer's promise to pay is a waste of your time and previous efforts.
Delaying Escalation: After 2–3 months of non-payment, the likelihood of recovery drops sharply. Assign the debt to a specialized agency or attorney—they have tools you lack. Holding on to past due balances too long strains resources and ties up cash flow.
Some Final Words on Preparation and Persistence . . .
To be an effective collector, thorough preparation is essential. You must fully understand the details of what is owed to communicate confidently and address any questions or concerns the customer may have. Additionally, understanding the customer’s situation—such as whether there is a pending order or if their credit limit is at risk due to past behavior—helps you tailor your approach and motivate timely payment.
It’s important not to shy away from objections; in fact, skilled collectors recognize that the real work begins when a customer initially says “no.” Persistence is key, but it must be balanced with professionalism—being persistent without becoming aggressive or obnoxious preserves the relationship and increases the likelihood of payment. By verifying all details, anticipating objections, and following up consistently and respectfully, effective collectors turn challenges into opportunities and achieve better results.