For some people, collecting on past due and delinquent accounts is the worst part of their job. For others, it's exciting and exhilirating. I fall into that category. When I was an Assistant Manager and my primary job function was collections, I loved every minute of it. Every time I collected on an account that others deemed hopeless, I got such a rush. It was so rewarding to me to know that I did something that other people struggled with.
It wasn't always like that, though. It took me a long time to get comfortable with collections, to move past the personal feelings I had for my residents and to get a process down that worked for me. But once I had that accomplished, I was comfortable with my role and success soon followed. So if you're one of those who thinks this is the worst part of your job, here are some of the ways I evolved in my role as a collector.
Establish Your Collection Process
If your company already has clear collection guidelines in place, then of course, follow what they say. But if they don't, it's in your best interest (for the sake of your sanity) to create collection guidelines yourself. Here's a snapshot of the process I created for my company....
Move Out Collections
1. When a resident gives notice to vacate, send a notice to vacate acknowledgement form that includes details they need to know about to prepare for their move and schedule a pre-move out inspection of their apartment for roughly 2-4 weeks prior to their move out date. This inspection is where you're going to try to get an estimate of charges to collect on before they move out. You'll also include any charges you may already know about, like lease termination fees, past due balances, etc. Anything you can assess and collect on before the resident moves out will certainly be in your best interest.
2. Once you've completed the pre-move out inspection and have assessed known damages, create an invoice including all owed charges and send it to the resident with a due date of their move out date. Send this notice on bright paper so it is noticeable and looks important.
3. A few days before the invoice is due, contact the resident by phone or email to let them know you haven't received their payment and remind them it's due when they turn in their keys.
4. Once their move out date has come and gone, you'll likely find yourself with that prior balance still due. You may get lucky with some, but for the most part, people won't pay until they're out. That's ok. You tried. So from here, you'll complete the actual move out inspection, assess final charges, and send an invoice to their forwarding address (which you should collect when they give their notice). Give them 15 days to make their payment.
5. If the next payment date has come and gone, pick up the phone and give them a call. Be friendly and just remind them that you haven't received their payment. Be nice as pie and hopefully they'll arrange to make the payment right then or tell you when you can expect it. Also send another friendly reminder of the past due invoice and give them 15 days to pay.
6. Once that payment due date passes, now is the time to become more firm. Send a notice outlining your next steps should they not make their payment. Tell them about the damage that could occur on their credit report as well as how it will affect their ability to rent elsewhere. Give them 15 more days to make their payment. Towards the end of those 15 days, another reminder phone call is helpful.
7. After 45-60 days have passed, it's unlikely that you're going to collect the full amount. If your company is flexible, this is the time to offer a settlement. After all, something is better than nothing. Plus, you'll just lose money sending it over to a collection agency anyway. I would knock off 25% off the top if they paid in full within another week, otherwise, I told them the account would go in full to an outside collection agency who may also pursue legal action.
8. If they didn't pay by this point, odds are they're not paying at all, so it's time to let go and send the account off.
Rental Collections
Collecting rent can be tricky. You want to maintain a high level of customer service, but you also need to be firm and collect your money. I think the best thing you can do to accomplish both of these things is to have clear cut guidelines for rental payments, make sure the residents are aware of them and do not deviate from them. For example, our rent was due on the 1st, late on the 6th, evictions filed on the 11th. No exceptions. If you were filed on, you had an opportunity to pay and stay if you paid your account in full by the court date, but you could only use this free pass one time. If we had to file again, we wouldn't drop the suit. Making residents aware of your process up front keeps the situation clean and clear because everyone knows what to expect. When there are no surprises, people stay happy and disagreements are kept to a minimum. Plus, I've also found that by being firm on your legal action, you have a lower rate of delinquency because no one wants that to happen!
To futher assist in our rental collections, we placed a bootleg "rent is due" reminder sign at the property entrances at the end of each month, a sign by the mailboxes, a reminder in our newsletter and also emailed a link to our rental payment website as a reminder to those who paid that way. These few things also helped with those few residents who had a tendancy to "forget" when rent was due!
Put Your Job First, Feelings Last
This is perhaps the trickiest part of being a collector. Your heart sympathizes with every job loss, every illness or every string of bad luck. But your business mind knows that while these problems are terrible, you still have a job to do. It's a tough thing to come to grips with, but the sooner you can separate these things, the easier your job will be. It's not that easy, I know. It took me years before I was completely comfortable. It's a fine art and there's really no right or wrong way to get there, but just know that it's critical that you find a way to make it happen.
I hope these tips and tricks on collections help you and your team. There's far more I can say on this topic, so if you have any questions at all, feel free to let me know!
Morgan Oney, CAM
http://www.mynewsletterconnection.com/
Internet and email newsletters for apartment communities to communicate with their residents
YES! You can include a link to your rental payment website in our newsletters! :) How's that for help with your collections?!?!
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