Collections Strategy Outline

I. Introduction
Objective: To outline a structured approach for managing and collecting overdue
payments from customers in accordance with the credit policies and guidelines of Laia
Alora.
II. Early Communication
Step 1: First Reminder
 Send a polite and friendly reminder notice to the customer via email, SMS, or
letter.
 Clearly state the overdue amount, original due date, and the new due date.
 Encourage prompt payment and provide contact information for inquiries.
Step 2: Follow-up Communication
 If no response after the first reminder, send a follow-up communication that
reiterates the urgency of the situation and potential consequences of non-
payment.
 Offer assistance and payment arrangement options, if applicable.
 Provide a clear deadline for response or payment.
III. Escalation Process
Step 3: Personalized Contact
 Make a courteous phone call to the customer, emphasizing the willingness to
help and discussing possible payment solutions.
 Document the call, noting any commitments made by the customer.
Step 4: Formal Written Notice
 If phone contact does not yield results, send a formal written notice.
 Clearly outline the outstanding balance, payment terms, and potential actions if
the debt remains unpaid.
 Include a specific deadline for a response or payment.
IV. Resolution Options
Step 5: Payment Arrangements
 If the customer responds, work collaboratively to establish a payment plan that
aligns with their financial capacity.
 Ensure the plan includes a schedule for repayments and obtain the customer's
commitment in writing.
Step 6: Negotiation
 In cases of financial hardship, consider negotiating terms, such as reduced
settlements or extended payment periods, to facilitate repayment.
 Document all negotiated agreements clearly.
V. Legal Considerations
Step 7: Legal Review
 If amicable resolution efforts are unsuccessful, consult with legal counsel to
assess the feasibility of legal action.
 Ensure all actions are taken in compliance with relevant laws and regulations.
Step 8: Legal Action
 If advised by legal counsel, initiate legal proceedings to recover the debt.
 Maintain meticulous records, including all communication and agreements.
VI. Final Steps
Step 9: Debt Recovery
 Continue pursuing the debt through legal channels if necessary.
 Seek judgments and execute collection actions as permitted by law.
Step 10: Reporting
 Report delinquent accounts to credit bureaus as warranted by legal and
regulatory requirements.
 Maintain comprehensive records of all collections activities.
VII. Customer Relations
Step 11: Post-Resolution
 After successful resolution, express appreciation to the customer for their
commitment to resolving the matter.
 Offer ongoing support and reinforce commitment to their satisfaction.
VIII. Continuous Improvement
Step 12: Review and Feedback
 Periodically evaluate the effectiveness of the collections strategy, seeking input
from the collections team and customers.
 Identify areas for improvement and adjust the strategy accordingly.
Communication Plan for Delinquent Customers

I. Introduction
This communication plan is designed to guide interactions with customers who are late
with payments while adhering to the collections strategy and customer selection criteria.
The goal is to encourage timely payments, maintain professionalism, and preserve
customer relationships.
II. Customer Segmentation
Customers will be segmented based on the severity of delinquency:
1. Early Delinquency (0-30 days overdue): Customers who are within 30 days of the due
date.
2. Mid-Level Delinquency (31-60 days overdue): Customers who are between 31 and
60 days overdue.
3. Serious Delinquency (61+ days overdue): Customers who are more than 60 days
overdue.
III. Communication Frequency and Methods
Early Delinquency (0-30 days overdue):
 First Reminder: Send an automated reminder email or SMS shortly after the due
date, reminding the customer of the overdue payment.
 Follow-up Communication: If no response within 7 days, send a personalized
email or make a courtesy call offering assistance and payment options.
Mid-Level Delinquency (31-60 days overdue):
 First Reminder: Send an automated reminder email or SMS shortly after the due
date, reminding the customer of the overdue payment.
 Follow-up Communication: If no response within 7 days, send a personalized
email or make a courtesy call offering assistance and payment options.
 Second Reminder: If still no response within 15 days, send a formal letter via
mail, reiterating the urgency and consequences of non-payment.
Serious Delinquency (61+ days overdue):
 First Reminder: Send an automated reminder email or SMS shortly after the due
date, reminding the customer of the overdue payment.
 Follow-up Communication: If no response within 7 days, send a personalized
email or make a courtesy call offering assistance and payment options.
 Second Reminder: If still no response within 15 days, send a formal letter via
mail, reiterating the urgency and consequences of non-payment.
  Legal Notice: If no response after 30 days from the second reminder, consult with
legal counsel to initiate legal proceedings.
IV. Personalization and Assistance
 All communications should be polite, empathetic, and offer assistance.
 Payment arrangement options should be clearly explained and tailored to the
customer's financial situation.
V. Documentation and Records
 Maintain detailed records of all communication, commitments made by the
customer, and agreements reached.
VI. Continuous Review
 Regularly review the effectiveness of the communication plan in line with the
collections strategy, seeking feedback from the collections team for continuous
improvement.
Sample Letters and Emails

Sample 1: First Reminder Email (Early Delinquency)

Subject: Payment Reminder

Dear Jasmin S. Lungay,

We hope this email finds you well. We wanted to remind you about an upcoming
payment that is now due. Your payment of ₱ ------ for invoice #068491 was due on
October 30, 2023.

We understand that sometimes delays happen, and we're here to assist you. If you've
already made the payment, please disregard this reminder.

If you need assistance or have any questions, please don't hesitate to reach out to our
customer support team at [email protected]. We are here to help you find a solution
that works for you.

Thank you for your prompt attention to this matter. We value you and appreciate your
commitment to fulfilling your payment obligation.

Best regards,

Jardine Reine Quiamzon

Subject: Reminder: Invoice #068491 Payment Due: October 30, 2023

Dear Jasmin S. Lungay,

I hope you're doing well. We wanted to follow up on our previous email regarding your
outstanding payment for invoice #068491, which was due on October 30, 2023.

We understand that life can get busy, and sometimes, payment dates can slip your
mind. However, it's crucial to address this matter promptly to avoid any potential
disruptions to your account.

If you're experiencing difficulties or need assistance with making the payment, please
don't hesitate to contact our team at [email protected]. We are here to work with you
to find a solution that suits your circumstances.

Your prompt attention to this matter is greatly appreciated. We value your business and
are committed to assisting you in any way we can.

Best regards,

Jardine Reine Quiamzon

Dear Jasmin S. Lungay,

This email is a notification that payment for your account is now 60 days past due. This
matter requires your immediate attention. Details for your payment are as follows:

Invoice #068491
Due Date: October 30, 2023
Amount:₱-----
Late Fee:₱ -----

Please let us know the status of your payment as soon as possible. If you need to set
up a payment plan or have any other questions, you can email us at
[email protected].

We hope to resolve this matter quickly; continued delinquency will result in the closure
of your account, and you will be referred to a collections agency.

Sincerely,

Jardine Reine Quiamzon