How to be outrageously successful in Debt Collection

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IrelandTogether’s member Seamus English explains the best approach to successfully recover your business debt and Cashflow


In this article, I explore a practical approach to recovering your business debts. I will look at organising your data before making contact with customers, the actual communication with these customers, and who is best placed to carry out this communication, to ensure the best possible outcome for you.

I recently worked with a client who asked me to follow up on outstanding customer balances for them. The list was long and most of the balances were low value, but they added up to a considerable amount, which if received, would make a difference to their bank balance. This business owner had relied on a manager in the past to stay on top of the debt collecting. It wasn’t successful. The owner themself did not have the time to follow up with customers. So, they outsourced the process. An organised approach was needed, and this approach resulted in considerable success for the business owner.

Outstanding Debt

You have a list of debtors that has amounted to a considerable value over the past few months. Some balances are material and others are low value. You have in the past been more concerned with the high-value ones and have followed up with most of them. You have tended to ignore the lower values, but in time they have added up.

This situation is having an impact on your Cashflow and this is felt more so now as the pandemic continues. Sales are down but expenses still need to be paid. You need this cash and now.

This is causing you concern. You are struggling to pay suppliers on time, if at all. You are tending to avoid their phone calls because you know that the funds are not there to pay them. You are feeling the stress and this is impacting your personal and business life.

By focusing on your list of debtors and getting in most of the much – needed cash, this will allow you to pay suppliers and wages on time, thereby relieving this element of stress. You will be able to concentrate on growing your business, and in these Covid-19 times, this may mean branching out in a different direction. Finances need to be managed to ensure that you can continue in business, in whatever direction.

Collecting Debt-procedure

Your list has names and balances and a debt aging, but little else to go on in terms of previous communication history with the customers/clients or contact details.

Having this minimal information means that you are not able to make progress in sending that initial email or making that call.

As a result, time is moving on and this makes the debt even more difficult to retrieve.

Having a procedure in place and making progress in getting the balances paid to you, will gradually improve your cash flow and reduce your stress levels.

Getting in contact with your customers and keeping the communication open is important for your business, apart from the recovery of the balance. Some or all of these customers may wish to do business with you in the future and you need to keep that relationship open and let them know that they are valued, even if they have let their payments slip for a while.

The steps

1.    Prepare an organised list, in a spreadsheet. Gather contact names, email contacts, telephone numbers, and previous communication history about the outstanding balance

2.    Insert your own internal reference for each line, to be used in all correspondence and online bank transfers

3.    Decide to follow up on the highest value balances first. Sort the data

4.    Draft your initial email. Be pleasant & professional in your tone. Use this layout for all customers, with suitable tweaks

5.    Give them a deadline date to respond by. Ask them in the email to give the reason for non-payment. Perhaps they need more information, copy invoices, etc

6.    Act on all responses received-send the customer what they need, be it copy invoices, and/or a statement showing all invoices issued to them and all receipts that they have made to date, if any

7.    Keep your spreadsheet updated with all communication, both TO the customers and FROM them

8.    Draft your second (follow-up) email and send it to those that have not responded to the first. Again, log all actions on your spreadsheet

9.    If there is no response to either your first or second email, then it is time to make phone calls

10. Be professional, friendly, and courteous on the phone. Explain why you are calling but most importantly, listen to what the customer is saying to you. Take note of anything specific that they need from you. Avoid confrontation and promise to send them what they need, to progress payment of the debt

11. If they say that they cannot afford to pay in one lump sum, then ask what they can afford now and make suggestions for a payment plan for the remainder

12. Summarise the agreed plan on the phone and confirm the details in an email

13. As the debts are paid to your bank, again document these on the spreadsheet, so that you avoid making an unnecessary follow up. Filter out the paid balances as you work through your list

14. Make use of a Pivot Table to keep a summary of payments received and those still outstanding. Seeing the payments received total increase will encourage you to keep going with the follow-ups

As a business owner, you may have a personal relationship built up over the years with some or all of your customers. This, understandably, could make it difficult for you to personally follow up with them for debts due. Asking someone independent from the business relationship makes it easier to recover the debt. The personal element is taken out of the process and the focus is purely on the balance, what information is needed to make progress, and ultimately on the recovery.

In conclusion, this article is not about handing over your debts to a formal collection agency. It is about you the business owner, or preferably someone assigned by you, taking control and giving the procedure the focus and organisational skills necessary, to achieve the best possible outcome. There will of course be debts that will need to be written off, and these must be documented(this will also help the accountant who is preparing your annual accounts), but at least you have tried your best, in a structured professional way. By having communication with your clients during the process, you or your dedicated person, have also ensured the possibility of future business with the slow-paying clients. In my opinion, the result is a win-win situation for both sides.

If you wish to discuss this article in more detail, please contact Séamus on 085-7653480 or

Vithoria Escobar

Masters educated Public Relations and Marketing professional, with seven years international experience planning and managing strategic communications. Results-driven, with substantial knowledge across multiple industries and markets, including Digital, Technology, Corporate and Public Affairs. Available for both permanent and temporary roles in Digital Marketing, Social Media, Content Creation & Public Relations.

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