Do you ever look at "why" some accounts are slow or no pays and others always pay on time? There has to be a reason for this. Here are some reasons customers may not pay:
- They are unhappy with the work.
- Some unforeseen event has occurred and they are short on cash.
- They never intended to pay you in the first place.
There are ways to prevent and avoid this from happening to your business. You should never have a customer that is so unhappy with your work that they don't pay you! Customer service is something you need to put time and effort into. Otherwise any money you spend on marketing your business if a waste.
If there is an unforeseen event that happens and they are having a temporary cash flow problem, you can refer back to your credit policy and see what your companies policy is in a situation like this. If you don't have a provision for this in your credit policy, you can set the customer up to pay COD for future orders while paying a monthly payment towards the balance due. This way you are helping the customer by continuing to serve them and bringing their balance down.
If they never intended to pay you, you should look at the signed credit application you have on file and look to see when the last time you reviewed their credit was. Maybe it is time to review all your accounts. Things and situations change, always stay up to date so you can protect yourself and your business.
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