Collection

Policies and
Procedures
PREPARED BY: PROF. DINA
BALDONADO
AGENDA
A. Classification of Debtors
B. Paying Habits
C. The Collection Function
D. Qualities of a Good Billing Collector
E. The Collection System
F. Collecting Delinquent Accounts
G. Thoughts in Collection Procedures
H. Seven Elements of a Collection Policy
I. Collection Letter, Importance and Types
Paying Habits
• This group consists • Fair Credit
of individuals and • Slow Credit
business entities that • No Good Credit
are conscious on
their financial
obligations
Prompt Delinquent
Payors Debtors
Delinquent Debtors
I. Fair Credit III. No Good Credit
◦ Careless Borrower • Lives beyond his income
◦ Complainer • Crook
◦ Unforeseen Problems

II. Slow Credit

◦ Poor management
◦ Marital Problems
◦ Coward
Classification of Debtors

The The The The Paranoiac Belligerent The

Cooperative Chronic Politician Uncooperative Or Elusive
Debtor Complainer Type And Pugnacious Type
Indifferent Type
debtor
Collections
The The Qualities of a
Collection Collection Good Bill
Function Department Collector

The Collecting
Collection Delinquent
System Accounts
Qualities of a Good Bill Collector

Industry Persistence Tact Resourcefulness

Thoughts in Collection Procedures
Why
Collectors Collection
Grow Trough
Gray Banks
Hairs?
Benefits
Those from
who
could be
Effective
of help Collection
Effort
Seven Elements of a Collection Policy

Collection is Selective in your Trained

Timing
made easier. Client Employees

Recognize Genuine
Communication
Opportunity Relationship
Collection Letters

Fundamental Principles

Importance

Objectives
Objectives of Collection Letters

2. To keep and
1. To collect the
retain the
money due to the
goodwill of the
company
customer
Qualities of a Good Collection Letter
Short and Use dated Revised Follow
Direct action Periodically pattern

Written from customer’s Humanistic Not a cause

viewpoint approach of anger

Written in such a way as to make it appear as if it were the

last to be sent to the debtor.
Types of Collection Letters
• Reminder Letter
• Past Due Notices
• Follow Up Letter
• Discussion Letter
• Appeal Letter
• Demand Letter
Questions?