Follow up activities for a collections process

We started on follow up activities and covered pre-delinquency level follow up

Continuing on this, let me share a trend with you. In most of the situations, where I have managed a collection process, I have seen that most of the clients, especially if they are mid-sized, do not really care for setting up a pre-delinquency level follow up. The collection departments start chipping in only after the amount has become overdue.

Of late, utility and large companies have started deploying this practice and they follow up on amounts before the overdue date is reached. By this, a lot of collections remain current. There is a thin line here. Ideally if your client has given his customer time to pay for the purchases, say 15 or 30 days, the customer would like to use that credit period to manage his cash levels. Hence too early a follow up might not work. For 15 days, ideally a follow up three days prior to the due date and for a month of credit, follow up a week before the due date really works. However a proportionate period does not work for longer credit periods. It has been observed that beyond that one week works for any longer credit periods.


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