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Effective Technique

In a number of business firms which are engaged in the grant of credit,

especially so in which collection work is a of some dimensions, certain
techniques have been developed which have been proven

For instance, in the first stage, which is sometimes termed as the reminder
stage, the following techniques are of immeasurable value in the collection
effort procedure: a) Duplicate statement or invoice, b) Use of stickers, c)
“reminder” letter, d) Printed cards, e) Aged statement and reminder.

In the follow-up stage, the techniques generally consist of the following: a)

Letters, b) Telephone calls, c) Registered letters, d) Personal calls or visit.

In the last stage, resort is made to the services of lawyers or collection

agencies.
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Registered Letters
When a delinquent pays no attention
letters and is not accessible to
personal calls or telephone
communication, the collector may
occasionally use a registered letter
to a good effect. In such a letter, the
creditor may call attention to the fact
that such other letters have not been
answered, and he may inform the
debtor of the condition of his
account, and any other details or
circumstances which may assist in
the collection.
The effectiveness of the registered
letter is due to its official character.
Registry is formal and unusual.
When a delinquent customer
receives a registered letter in the
reference to his account, he will in
many cases conclude that the
matter is becoming serious and as
such needed immediate attention
and action. The debtor knows that
the letter was registered and that
he has signed a receipt for it.
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Telephone Calls
In many instances, the telephone is
an effective medium in collecting
debts. It is a short cut which can be
used when a debtor fails to respond
to other communications. It gives
the collector an opportunity to talk
personally with the debtor and
obtain a promise of payment; or to
ascertain what the situation is so
that he can shape his action
accordingly.
Collection through the
Use of Drafts
In some instances, it may become
necessary to use drafts in enforcing
the settlement of an obligation such
instrument is commonly used by
wholesalers and manufacturers. It
represents one of the more urgent
steps in the collection series. In some
lines of business, the first or second
letter may be followed by a draft; in
other line of trade the terms of credit
stipulate that if the account remains
unpaid after certain time, a draft will be
drawn upon the customer without
further notice.
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Telegram

In any written communication which

refers to an indebtedness, much
care must be taken to avoid liability
under the laws against libel and
blackmail. Anything writer, it may be
pointed out, is “in black and white”
and thus if it goes beyond the limit of
the law, the sender himself supplies
the inconvertible proof which may
convict him.
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BAD DEBTS
As borne by experience on the part of
many businessman, notwithstanding
measures and efforts to collect accounts
receivable, not infrequently, there are
occasions wherein debts could not be
collected for some reason or another. To
companies under such a predicament,
the usual question is asked: when and
under what circumstances should be
written off?
1. The debtor-customer has become
declared insolent.
2. Inspite of diligent efforts as well as
exhaustive remedies, the customer has
stubbornly refused to send any reply or
take action to settle his obligations.
3. The inability to locate the whereabouts
of the debtor-customer withstanding
diligent efforts and the use of means at
the command of the creditor company.
4. The business has ceased operation for
several years.
5. The untimely demise of the customer
leaving obligations behind which the heirs
could not of have stubbornly refused to
honor and settle.