‘Won’t Pay’ Customers – Do You Have Any?

 August 26, 2016
Posted by qc

“I’ll definitely make a payment online overnight.”  Is this what you constantly hear from your debtors but payment never eventuates?

Stop!  Stop accepting the excuses as it may be affecting your business, hugely.  Are you writing off bad debt, receiving part payments, finding it difficult meeting your tax commitments on time and devoting time following up overdue accounts and even delaying your own payments to your own creditors because of it?

I learnt over the last week that a personal contact of mine is now bankrupt for the second time!  I am not privy of all the details, however it turns out this is due to struggling to collect outstanding debt.  Debt collection isn’t an easy task but it could either make or break a business and in this case the business owners clearly didn’t think to try something different and put steps in place to prevent the same situation happening again!

The sad reality is that there are people that seem to have no integrity or morales and will make every excuse under the sun as to why they’re unable to pay the bill or worse still, they’ll happily ignore phone calls, delete your emails and spend the money they owe you on something else.

What can you do to protect yourself?

Try the following suggestions and you’ll be on your way:

  • Try to arrange up-front payments before commencing any work, when you can.  This is even more important if you haven’t built up a relationship with a client or the client has not come from a referral.
  • STOP doing work for customers that haven’t paid their outstanding debt.
  • Be prepared before contacting the customer about the debt.  Have copies of invoices and statements at your finger tips.
  • Find out WHY your client won’t pay you – is it because they don’t have the money, isn’t happy with your service or do they wish to spend the money they owe you on something else.
  • Keep all correspondence and note down detail of phone conversations.
  • Offer a payment plan.
  • Don’t get angry with your customers.  ALWAYS behave professionally.
  • Monitor your debtors list and try not to have debt go outside 90 days.  The longer you leave the debt the tougher it is to get.
  • Outsource the task of debt collection and have the pain taken away.  It’s not on the favourite job list of a business owner and sometimes it is better that some one else does it.  It may also protect the business relationship you have with your customer.
  • When chasing the debt try an email first, if you don’t receive a response make a phone call.  Your making personal contact and this may maintain the relationship.
  • Consider whether this customer is the RIGHT customer for you.  Are you spending time chasing their debt when you could be concentrating on finding a client that is a better fit for your business and pays on time.
  • NEVER complain about a non-paying client to others — especially on social networks. It’s not professional and it is unlikely to result in a positive outcome.

If you need some assistance with your slow payers, please call Quintessential Concierge today on 021 898 661 or email on letitia@quintessentialconcierge.co.nz.


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