Debt Collection Strategies
For Propane Gas Companies

Propane gas companies' services are in great demand to businesses and customers all over the nation.. Many people, specifically in rural areas, use propane for cooking and/or to warm their homes in the winter.

Even as propane companies might provide their customers year round, their busier season is clearly during the colder winter months, when fuel usage peaks. Billing practices can differ by business, but customers customarily contract for delivery services and are billed at 30 days.

Due to the seasonal nature, with greater need and activity in the winter, debt collection problems can crop up. As businesses get busier with more frequent deliveries, their accounts receivable challenges also build up, especially if in house debt collection strategies are intermittent and inconsistent.

These challenges are further amplified as propane businesses are averse to stop service for non-payment, in view of the fact that heating is such a essential necessity. Keeping a good image in the community is important. Smaller businesses tend to know most of their clientele. Larger businesses with a much bigger client base can get even further behind on their difficult receivables.

Business owners also have to consider perhaps alienating and losing clients to the competition, while trying to get a handle on their growing delinquency challenges.

Here are some debt collection strategies to improve your in house collections.

Internal Debt Collection Strategies
For Propane Companies

After you've made a delivery to your customer, and before the bill's due date, make a courtesy call to your client to ensure that services were satisfactory. The call will serve as both a gentle reminder of the approaching bill due date, as well as rule out any potential problem that might cause a delay in payment. Debt collection problems are often prevented by communicating often and early with your customer.

If they're experiencing financial difficulties, this is the time you need to know, as you can possibly offer alternative payment arrangements. Getting at least some money is better than getting none.

Should the payment go more than 30 days past due, follow up immediately with a phone call to the client. Ascertain the problem and offer a payment plan. Follow up again at 45 days with a reminder notice, with another phone call 10 days later.

After 60 days with no payment, payment arrangements, or if there's been no communication from your customer, its time to consider more serious measures. By this time, your client should have received at least two statements and/or two telephone calls. Non-communication by this time indicates a more serious problem.

Because of the depreciation of money, as well as the decrease in recoverability, its time to consider outsourcing these difficult accounts to a debt collection agency.

Listed below are 3 Crucial Reasons Why Propane Companies Ought To Hire Debt Collection Agencies:

Debt Collection Strategy- Early Intervention Is Key

As frantic winter delivery schedules can take priority over collecting on past due bills, it’s crucially important to enlist the services of a debt collection agency, because the more these accounts age, they become more problematic to collect.

If these accounts are placed early enough, at around 60 to 75 days, not only are the collection recovery rates much greater, its also early enough to get clients back on good terms with the fuel supplier, and before the late balances grow even larger.

More Cost Effective Than In House Collecting

Propane companies may also consider traditional percentage fee agencies, but some percentage based agencies may treat these smaller balance debts with lesser importance than their larger account customers. This practice is called “skimming.”

The Effectiveness And Magnitude Of Third Party Influence

Because diplomacy is very important, and you don’t want to estrange your clients, collection agencies can implement more tactful and diplomatic debt collection strategies to persuade customers to bring their accounts current. Because they act as a dispassionate third party, this removes you from having to be the “bad guy” in pursuing your non-paying customers.