The best thing to do with bad payers is to stop dealing with them.
All the time you put into collecting money you are entitled to could be better used to generate income.
- When you get a bad payer, be systematic with your follow-up (every Wednesday, for example).
- If you ring them, make notes of what they say and quote them if needed next time.
- If you can’t get through by telephone, use emails and text messages.
- When you contact a bad payer, your objective should be to get a commitment to pay.
- Confirm the commitment by email.
- Keep the time you allow for credit as short as possible. For many businesses a request to pay within seven days of the date of the invoice is reasonable.
- Some large organisations have made it a practice to use their suppliers’ money. When you quote or invoice one of these customers, try to build in a premium to cover your costs of collection. Many big businesses are not particularly price sensitive because they are not spending their own money.
- If it is going to be a large bill, get agreement for progress payments.
- Insist on a credit check before you give credit to someone you don’t know.
