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You may be wondering, what exactly is soft collections?  In summary, it is a process used during the accounts receivable management process with the goal of being paid while maintaining the customer relationship.

As the owner of a staffing agency, one of your priorities is developing relationships with your customers. You get to know their companies inside and out — including their goals, needs and challenges — to fill their staffing requirements. Cultivating relationships continues even if your customers don’t pay your invoices on time. You can call these customers and find out what their situation is and hopefully work with them to avoid needing to move to a more formal debt collection process.

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Three ways a soft collections process benefits your relationship with your customers:   

1. Enhancing Relationships. A soft collections process enhances your relationships with customers. Having a personal relationship shows customers you understand, accept and empathize with them. You customize how you treat them in order to meet their needs. This includes troubleshooting any issues they may have with keeping current on payments to your company. Because you have established relationships, it’s easier to talk with customers who are late with their invoice payments.

2. Humanizing the Collections Process. Utilizing a soft collections approach and treating customers as valued partners increases your odds of getting paid. It’s critical that you remain calm when talking with these customers. Speak in a sympathetic, understanding manner. Ask questions to determine why your customers didn’t pay. In many cases, they forgot, or they could have cashflow problems or other issues. Find out what you can do to make things easier for your customers. Perhaps you can set up a payment plan or provide other repayment options. Continue to provide excellent customer service throughout the process.

3. Maintaining Your Brand. Treating customers with respect throughout the soft collections process is essential for your brand. You need to provide top-notch service every step of the way. Everyone deserves to feel valued, even if they didn’t pay their invoices on time. Focusing on the customer’s relationship makes the process more pleasant. Because your customers want to work with you, they see you as a valued business partner. As a result, they do what they can to make your invoices current.

Put yourself in your customers’ shoes.  If you had multiple vendors contacting you for payment, which one would you pay first and which one would you most likely continue partnering with?  The company that uses a demanding and threating approach is sure to lose out every time.

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