Know When You’re Being Stalled by Your Debtor

It’s important to understand why your debtor hasn’t paid on time to improve your chances of successfully collecting revenue. This can also help you formulate a better overall long-term collection strategy when dealing with past due accounts.

#1 They Have a Genuine Complaint

Unfortunately, some customers withhold payments to renegotiate the price. There are several ways to identify such customers.

They have been nitpicky from the start
They have not responded to emails on time
They are late for or miss important meetings
They have been hesitant to sign a contract
They have been unsure of what they wanted
They’re a new client and haven’t provided references

On the other hand, every effort should be made to resolve disputes with customers who have a genuine complaint. Offering discounts or addressing the complaints are good options. Amicably resolving such concerns is advisable to maintain your relationship with the customer and preserve your reputation.

As a debt collection company that’s successfully served a variety of businesses across a broad range of industries for over two decades, we know that every customer is different. Your strategy may have to vary with each situation. That’s why we’ve written some tips on making challenging clients into happy clients for businesses of all sizes. Remember, a challenging new client today could turn into your best client in the future.

#2 They Have Gotten Busy

It happens more often than you realize. Sometimes clients are overwhelmed by work. Perhaps they’re in the middle of an expansion, have recently lost key members of their staff, or are a seasonal business experiencing a spike in orders. If they’ve missed the invoice date, simply send them a timely reminder on email or letter. If some time has passed, then pick up the phone. Remember to maintain a professional tone.

#3 They Are Facing Temporary Financial Problems

Cash flow problems can hit any business. If your client is temporarily in a tight situation and is honest about this with you, then you may consider giving them time. Perhaps they’re waiting to secure a short-term loan, or their payment is around the corner. Maintain a friendly and honest relationship with your clients to learn about these issues early.

When dealing with such a debtor, you can divide their payment into more manageable monthly installments. You may also offer to drop the late payment fees. In the future, you can try progress billing to get paid in smaller amounts but earlier.

#4 They Aren’t Organized

Some clients don’t pay on time simply because they’re disorganized. Such customers may regularly pay late. You can motivate them to pay on time by offering incentives such as extra products and discounts or by charging late fees.

Always send invoices to such customers on time and offer multiple payment options. If they don’t have their checkbook handy, then they can pay electronically. You may also consider befriending someone in their finance department. Developing such relationships can help you get paid faster.

#5 They’re Making a Point

Sometimes businesses, especially larger ones, will deliberately pay late if they’re not completely satisfied with your services. If they’re paying late because your services weren’t delivered on time, then consider improving your workflow.

Recognize When They’re Stalling

Unfortunately, your debtor may simply be stalling. They may ignore the due date, invoices, emails, and reminders, before finally asking for more time. Then, they’ll miss the new deadline too. Perhaps this client can pay but is dishonest. Or maybe the company is closing and they’re stalling as many creditors as they can. Watch out for the warning signs:

Their company has a high labor turnover
Morale at the company seems low
They also owe other businesses payments
Their stock is falling
They’re regularly paying late
Their order volume has been dropping

As your trusted agency for commercial debt collection – we know that debt grows harder to recover with time. That’s why it’s important to use professional help quickly when you feel that your client is stalling. It’s important to act before their business shuts down or their creditors reach them.

At Summit A*R, we achieve real results. We boast a recovery rate that’s twice the national average across a broad range of debt types. Usually, our campaign of official phone calls and demand letters is enough to recover revenue because of our reputation.

Unlike your in-house collections department, we can also report debtors to credit bureaus. Remember, businesses also have credit scores. A business with a bad credit report will find it difficult to secure important loans and investments or do business with other companies. Many debtors pay when they realize that their credit score could be adversely affected.

Over the years, we have recovered some particularly difficult debts because of our experience and resources. We also have a full-service litigation program that’s assisted by an attorney.

Our licensed private investigator will complete a thorough financial investigation of your debtor and then conduct a cost-benefit analysis of pursuing legal action. If the possibility of recovery is good, then we will present you with this option.

We will only take this step if you give us your approval in writing. Otherwise, we will return your account to the collection queue for more recovery efforts.

Regardless of the nature of the debt, it’s important to remain diplomatic and professional to maintain your reputation and to avoid legal complications. As one of the most trusted bad debt collection services in the United States, we take an ethical approach to collection by maintaining a professional and respectful attitude. There are people behind every company and deserve to be treated as such.

Not only is this good for karma, but it’s highly effective. People respond more positively when treated with humanity. On our website, not only will you find positive reviews from our clients, but you’ll also see hand-written testimonials from debtors who were happy to pay off their debts with dignity.

We’re also proud to be rated A+ by the Better Business Bureau (BBB). This rating is only given by the BBB to companies that maintain an excellent level of customer service.

If you suspect that your debtor doesn’t want to pay, then don’t waste precious time. Get in touch with us today to learn more about your options and get advice from our collections team. You can use our website to request a callback, send us an email, or call us.