The Rats Tales

Do-it-yourself debt collection isn't difficult - but you'll be much better at getting your own money back if you follow some simple rules, develop a professional attitude, and don't make 'getting your own back' part of the process.

Your attitude toward your debtors matters - and building good relationships with your customers matters even more.

Successful debt collection has never been about aggressive or confrontational behaviour. In fact that sort of behaviour can bring out a mulish 'neither to be driven nor led' attitude in quite a lot of people, and that's something you need to avoid at all costs. Making friends and influencing people is the secret of getting money out of can't pay, pay late, and even won't pay customers, so if you want to do some or all of your own debt collection, making friends and influencing people has to become a priority.

Ideally, that means laying the groundwork for good working relationships with all your customers from day one - and those relationships need to extend not just to the proprietor or Director(s) of the company, but to the person who handles your account on a day-to-day basis as well.

Of course it's essential to identify, and make yourself known to, the person at the top of the heap - after all, that person usually signs the cheques - but the credit controller or bookkeeper who handles your account can be just as influential when it comes down to who, out of the whole of his her ledger, gets paid on time - or at least less late than other people.

Making 'friends' of those two important contacts and getting onto first name terms with them isn't as difficult as you might think, because these days most people tend to treat their commercial contacts (even unwelcome commercial contacts like me!) very much as they treat the 'virtual friends' they meet through Facebook or any other social networking website; talk to them in the same informal, familiar and confidential way, include personal information in their e-mails, and take the time to exchange views on totally unrelated subjects in their telephone conversations before getting down to the nitty-gritty of what the call or the e-mail is really about. In fact, having been around for as long as I have (and that has been rather a long time!) I'm perpetually astonished - and delighted! - at how simple it's become to get onto first name terms with debtors, and into that confidential space where negotiation and settlement becomes a real possibility.

The habit (and it is a very widespread habit now) of making 'virtual friends' willy-nilly out of people who are actually total strangers can give you a huge psychological advantage when things go pear-shaped if you adopt and use it yourself - as in fact I have - because you'll cease to be just a name on a ledger or a useful but otherwise anonymous entity and become a real person and, of course, a 'friend'.

Most people tend to feel guilty about the prospect of letting a friend down, even if that friend is just a 'virtual friend' rather than someone they might meet for a drink or invite to dinner. In bad times, that automatic emotional response can put you at the top of the payment queue - and as these are very bad times indeed, at the top of the payment queue is more than ever where you want to be.

Deliberately using social networking tactics to gain a commercial advantage probably sounds like a very cold and calculating thing to do, but in fact it isn't. Commercial 'virtual friendships' can of course be very shallow - but they can also become genuine friendships that are strong enough to outlive redundancy, relocation, or retirement. They may dwindle away over time to the odd e-mail or a card at Christmas, but they survive because they are human relationships that can be interesting and enjoyable as well as supportive and useful. And it's worth remembering, of course, that when people move on, they tend to stay in the same trade if they possibly can, so the next port of call for a job-swapping or relocating 'friend' could mean a new customer or supplier for you - just as, over the years, other people's debtors have become a source of fresh clients for me.

If you're not working at building 'friendly' relationships with your paying customers, you should be. And it's not too late to begin to build 'friendly' relationships with customers who aren't paying, aren't paying on time, or consistently use delaying tactics to avoid payment. It's really just a matter of being 'friendly', reasonable and accommodating until being 'friendly', reasonable and accommodating becomes an unreasonable proposition.

And incidentally, whilst we are on the subject to making friends and influencing people - don't forget your suppliers. You, too, may one day need to delay payment, negotiate settlement over a period, raise queries, or settle disputes. If that happens, you'll find that 'virtual friends' can be much more prepared to be reasonable and accommodating than virtual strangers.