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23rd November 2009, 09:20 AM #1Junior Member
- Join Date
- Oct 2009
Collecting on delinquent accounts
We are dealing with a huge collection problem at one of our facilities (over $20k). We are beginning the legal process to (finally) sell units, but in the meantime we are attempting to collect as much rent as possible. What are the best strategies people have used to collect payments? How often does everyone call delinquent accounts?
23rd November 2009, 12:24 PM #2Senior Member
- Join Date
- Aug 2008
we try to begin courtesy calls one day before the late fee goes on...getting to as many as possible, and i collect a LOT of money that day and customers appreciate it...some come in the next day with their cash or check, still missing the late fee.....the rest, we follow the law of our state as far as letters, lein fees, publishing, etc.
Since you are so far behind, i would try to make a certain amount of calls each day just simply stating something like "this is the last courtesy call, if you pay now i will waive XX late fee and if you set up an automated montly payment system, we can save you XX (i LOVE autopay customers!) in additional to the other fee for setting that up and paying today make sure those customers understand this is a ONE CHANCE deal....get that $$ coming back in!! After those calls, begin with your states collection process and move forward getting rid of the non-payers and getting in some better tenants. Of course, this would all be subject to your parent company's approval if you aren't the owner.....i would think it would be a huge feather in your cap to come up with a great idea to get a lot of that debt cleared up
23rd November 2009, 01:35 PM #3Senior Member
- Join Date
- Jan 2008
At our location I make the collections calls everyday. If someone already has an arrangement I of course do not contact them unless they defaulted on the arrangement. I use e-mail address to reach many on the late list, I also call the alt contact and stress to them how very important it is that I get a message to(tenant). I also have resorted to getting Birthday card envelopes and rather than using the company name I just write in our street address this way they have no idea who has sent them a card and they open it non suspecting...lol Really , I have collected a lot using that trick. I dont jump right to lien, ours is cut the lock at 51 days and I have to say that I recently collected on an account that was 174 days past due, and when he paid the account up to date he then fronted me a year in cash!!!!Sometimes you can still get the dead beats to turn around. Good luckLovin it.
23rd November 2009, 03:00 PM #4Member
- Join Date
- Oct 2009
This is by far the least favorite thing I have to do - collection calls. Fortunately, I'm only at the facility 2 days per week and the collection call days rarely line up with those days (my relief manager is stuck with the task).
We usually offer to waive the late fees if they can pay before the 15th - this coaxes a lot of people to pay with a CC over the phone. But after I pay the mortgage for the building, I'm MUCH less lenient. I get the attitude that these late payers did not help me pay my obligations and they're stuck with the late fee because of the trouble.
I also find it useful to call on the Saturday after the first late call, simply because most of the people are unavailable during business hours. Usually that Saturday, my day is consumed on the phone.
Besides waiving late fees, lockouts and over locks, I don't have many other carrots or beat sticks hidden up my sleeve. I've been avoiding lien sales, but after really catching up on the legal side of things, I am not so hesitant anymore (it's probably still not worth the trouble, though). More often than not, I offer the lien people a one time offer of $50 to get in and get their stuff out. They of course will never be able to rent from me again, even if they won the lotto.
A lot of banter with little advice. Sorry. Good luck with your later people.
23rd November 2009, 06:02 PM #5Junior Member
- Join Date
- Sep 2009
We make courtesy calls the day rent is due (just a reminder), the day before late fee hits (trying to save you some money), and the day before lein fee hits. We have only had two auctions in nine months, with a total of 5 units being auctioned. This may or may not be company policy, but it works for us.
24th November 2009, 03:42 PM #6
We have started making collection calls daily. People think we're "buggy" but, if they don't want to hear from one of us, all they have to do is pay their bill on time! My delinquent accounts rec. has gone from $18,000+ to about $2,500. I have had an auction nearly every 3 months this year, but I always give late tenants the chance to pay up, or I make "deals" to pay 1/2 and move out. I have been sending out pre-lien letters regularly and for the most part, the ones that are gonna pay do so when the first certified letter arrives. There will always be the ones that know you won't sell their stuff until the Lien letter comes certified and they won't pay until the day of the auction. Those, I don't make deals with. If you are scheduled for more than one auction, you get to pay in full or I will auction the unit. I'm "buddies" with so many of my customers and I think it makes it harder for them to not pay a "friend". I'll work with anyone as long as they keep up their end of the bargain. I thnk the constant phone calls and late letters and e-mail reminders has really been worth it for us. We're a small company and it's been a rough year! But, things are looking up!!Have you ever stopped to think and forgotten to start again?
24th November 2009, 05:12 PM #7
Same here. We call about every 3rd day, send letters etc etc. We also will make deals and work with people. We will waive late fees and Lien fees. But I also make those tenants pay up and move out!! I have found that the first time the tenant is late, I NEVER waive a late fee. If they see you are serious about your policies from the get go, it really helps to prevent bad habits from forming. Of course, we learned that the hard way!! Taking over existing problems always involves a bit a cleaning house, taking two steps back, but pays off in the end. We have been less than 1% on our delinquencies for 4 years in a row now!!Stephanie Tharpe
Senior VP of Operations
A+ Storage of Tennessee, LLC
24th November 2009, 05:50 PM #8Senior Member
- Join Date
- Sep 2008
- Hot Springs,AR
We do the dialing for dollars every month. We send out late notices on the 6th and when we notice some customers that usually pay on time are running late we will call and remind them they are late and offer to waive the late fee if they come on in and pay, we'll always call them before we run the add in the paper for auction and give them the chance to come in and pay up, we explain to them that after a certain day the cost to get caught up will increase a lot due to running adds and cutting locks and so forth, if they want to keep there stuff they always make arrangements because at that point they realize we are serious and they are going to lose there things.
A lot of times the certified letter gets them moving but sometimes they still don't do anything until we call. We collect a lot of past dues with a phone call. We have had more here lately that get most of what they want out and then not pay anymore, they just let it go and when we open the unit it's just left behind trash that we end up hauling to the dumpster.