13 tips for Business debt collection in hong kong

13 tips for Business debt collection in hong kong

1. Adjusting the Dominant Mentality

It is an indisputable fact that debt collection is difficult. Due to this difficulty, many salespeople approach customers with a flattering demeanor, begging for understanding and support, and responding with hesitance and shyness, as if the debtor is not in the wrong, but rather they themselves are. This can make customers feel like they are "easy to bully," leading them to deliberately make things difficult or refuse to pay.

First of all, it is important to straighten your posture. The first thing you say when you see a debtor is to establish your dominant attitude. You should emphasize that "I" supported them and paid a price. For example, you could say, "Your brother turned this into a business without capital," or "I had to ask the supervisor for approval to extend credit for this product, which took a lot of effort." You don't need to chat for too long when you meet. Before the debtor expresses any merits or complaints, tell them straightforwardly that the purpose of your visit is not to sell them goods, but to collect payment for goods that they have already received.

This approach can help the debtor get rid of any thoughts of procrastination, delay, evasion, or hiding. You can't give the other party any chance to be in an active position, so be prepared to deal with their reactions.

Some collectors think that being too aggressive with collection efforts will make the other party unhappy and affect future relationships. However, if you think this way, you will never receive the payment, and you may also lose future cooperation. The more the customer owes, the more difficult it is for them to pay, and the easier it is for them to switch to other companies for purchases. Therefore, it is better to step up collection efforts and assert your rights to the payment.

In summary, having a dominant mentality and being confident in debt collection can help you collect debts more effectively. By establishing your authority and emphasizing that the debtor owes you money, you can encourage them to pay their debts and avoid any further delays or evasion.

2. Do a good job in assessing the risk level of arrears

According to the scheduled recovery time and possibility of recovery of the arrears, the payment is divided into uncollected payment, collection payment, quasi-bad debt, bad debt, dead debt... several categories. For different types of payments, different collection methods are adopted and different collection efforts are imposed.

3. Make a comprehensive plan for debt collection

Based on factors such as the length of the loan term, the amount and type of the loan, the customer's reputation, personality, financial strength, distance from the company and other factors, make a priority debt recovery plan, or "Wu" or " Wen " "Get ready. For those dealers who have bad intentions and intentionally renege on their debts, they can only be collected by "Wu".

4. Keep records of transaction
Keep records of transaction . And ask the other party to sign to avoid future disputes. Clarify what goods the dealer bought on which day, and how much in total; and when each payment should be paid according to the agreement.

5. When collecting arrears from a dealer

When collecting arrears from a dealer, it's important not to simply walk away when you see another customer. You should explain your purpose and wait on the side. Dealers do not want their customers to see their creditors coming to their door, as this can be embarrassing and cause them to lose face in front of new friends. If the amount owed is not substantial, the dealer may try to quickly pay you back to get rid of you or to show off their performance to potential new collaborators.

6. It's important to prioritize debt collection

It's important to prioritize debt collection and not discuss business until payment has been made. If you engage in business discussions before receiving payment, the other party may use the arrears as leverage to bargain with you. If they don't get what they want, they may withhold payment as a way to "punish" you. Therefore, debt collection should be treated as the top priority. Even if there are opportunities for future business, they cannot be pursued until the outstanding payment has been received. By making this clear, you will have more control over the negotiation process and be in a better position to discuss future business opportunities after the payment has been made.

7. It is important to manage your time wisely

To ensure successful debt collection, it is important to manage your time wisely based on the debtor's willingness to pay. For customers who repay prom
ptly, it is essential to arrive at the agreed time or, if possible, ahead of schedule. Otherwise, the customer may become annoyed and say, "I have been waiting for you for a long time, but you didn't come. I have to do other things." This situation can be avoided by being punctual.

For customers who are not straightforward in repayment, it is best to call in advance and urge them to implement their repayment plan. This approach is more effective than showing up unannounced on the day of collection. If the debtor claims to have no money, it may be necessary to install an insider to verify their claims. When you discover that the debtor has cash on hand or has recently received a payment, you should immediately contact them to collect the debt.

Timing is also crucial when calling debtors for collection. Call them when they are in a good mood to increase the chances of cooperation. For example, it is best to call at 3:30 in the afternoon when they are likely to be in a better mood than in the morning. However, it is important to avoid calling during their lunch break, which typically falls between 11:45 am and 2:00 pm.

Another key time to collect debt is after the dealer has sold approximately 80% of their inventory. At this point, they are more likely to pay back the debt to maintain a good relationship with the company. Additionally, at the end of the month when the company pays out monthly bonuses, some dealers may be more willing to pay off part of their debt.

In summary, to successfully collect debt, it is important to manage your time wisely and approach debtors in a professional and courteous manner.

8. Pay attention to any abnormal situations

It is essential to pay attention to any abnormal situations that may arise when dealing with debt collection. Examples include a dealer's intention to quit and transfer their store to someone else, or a partner breaking up and deciding to operate independently. Other situations to watch for include changes in business operations, site demolitions, store relocations, or company bankruptcies. Whenever any disturbances occur, immediate action should be taken to prevent potential problems and avoid bad debts.

When a dealer or legal representative is about to leave, it is important to ensure that all outstanding debts are repaid before they depart. By maintaining a firm attitude, it is possible to obtain their cooperation and prevent the accumulation of further bad debts.

9. Debt collection personnel must be aware

Debt collection personnel must be aware that dealers may use various excuses to avoid making payments. Examples of such excuses include the absence of the person in charge of the funds, insufficient funds in the account, payment not yet being due, unsold products, or poor market conditions. It is crucial to collect and analyze all relevant information related to settlement in a timely manner. By doing so, it is possible to discern the truth behind the various excuses offered by customers and take effective countermeasures.

10. It is essential to make the best use of the situation

It is essential to make the best use of the situationand apply pressure skillfully when necessary. For instance, if the customer relies heavily on the selling company's products, when settling payments, it is important to follow standard procedures but also apply subtle pressure on the customer. This may involve developing new and more profitable products and creating a rule whereby only dealers with no outstanding arrears are allowed to sell them. Additionally, launching a specific promotional measure, and stipulating that only dealers who have paid off their arrears can implement it may also serve to pressure the customer to pay back what they owe.

11. Clear understanding of the accounts

In the process of collecting arrears, the salesperson needs to be organized and have a clear understanding of the accounts. If the debt collectors do not have the details of the accounts receivable in their minds, the collection effect will be poor. After understanding the accounts, the salesperson needs to reconcile the account with the debtor and obtain their signature as evidence to avoid disputes in the future.


12. It is important to promptly collect the payment

If you are fortunate enough to unexpectedly receive a large payment from a debtor who has not been proactive in repayment, it is important to promptly collect the payment and leave. Delaying or appearing too grateful may cause the debtor to feel like they are doing you a favor, leading to potential complications in the future.


13. It is important to be courteous

After receiving the arrears, it is important to be courteous. In every detail of the settlement process, such as filling in forms, signing documents, canceling accounts, registering payments, etc., it is important to express sincere gratitude to the specific person in charge. This can prevent them from intentionally making things difficult for you in the future. If you only receive a partial payment and there is a discrepancy with the agreement, you should show reluctance and express your dissatisfaction. If the other party truly cannot pay, then let them go. The main purpose of showing displeasure is to prevent them from breaking their promises easily in the future.

Usually, it is not necessary to patiently listen to the other party's explanation at this time. If a natural or man-made disaster has happened to the customer, while showing understanding for their difficulties, you should also make them understand your own difficulties. For example, you can explain that the company has not paid your salary for a month because of the unpaid arrears. When explaining this, you should be serious and emotional.