Why the First Collection Call is the Most Important - and What You Should Be Finding Out

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The first call is the most important collection call you make, according to Credit Manager James Norwood, CBF, for Industrial Computer Source, Inc. (San Diego). "This is when you can get more information than at any other time," he emphasizes.

During the first call, he usually talks with a first-line accounts payable clerk and is able to get large amounts of information on the "two P's"--processes and problems.

Processes. He takes the time to probe with the clerk, asking what the company's and department's procedures are for paying. For example:

If the clerk explains that the company requires end users to sign off on invoices before they are paid, Norwood makes sure this is arranged on all future billing.
If the company cuts checks every Thursday, Norwood knows to place calls each Wednesday to the clerk to find out if a check is being prepared for his company.

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Problems. Since the first call is placed as a result of a delinquent payment, Norwood also gently probes to identify the cause of the problem. And since he is talking with a first-level accounts payable clerk, he is usually able to gain lots of detailed information.

The company, for example, may be experiencing a temporary cash-flow problem, going through a merger, or experiencing a long-term cash-flow problem. It can be very difficult to get this kind of information on subsequent calls, for a couple of reasons:

When you place a subsequent call, you usually want to talk with a more senior person, and this person will usually be more guarded about sharing any more information than is absolutely necessary.
Even if you do talk with the same clerk on subsequent calls, he or she may be more guarded, primarily because the delinquency situation has obviously worsened (or you wouldn't be placing the call).

During the first call, Norwood pays attention to more than just the information (processes and problems) being shared. He also tries to gain a "gut feeling" for how sincere the customer is about paying.

Editor's Note: This article originally appeared in the Credit & Collection Manager's Letter.