10 Warning Signs Commercial Collections May Be Necessary Soon

A delinquent account can be a surprising new development in an otherwise healthy business relationship. But to a practiced eye, there’s almost always an underlying reason why your client isn’t paying on time.

As an experienced commercial collection agency, we’ve come to recognize the early warnings that an account might become overdue, and we’re here to share them with you today. Check out these red flags your client may have trouble paying their bills.

1. They Pay Bills Late

As warning signs go, this is a loud klaxon with an accompanying strobe light. A late bill is one of the most obvious signs an account might become delinquent.

While simple negligence could be to blame, it’s more likely your customer is suffering some kind of cash flow interruption of their own. The economic climate has never been more hostile, and many businesses are struggling even if they were flourishing just a year ago.

Pay close attention if a customer who usually pays on time is now chronically behind on their bills. The sudden switch in habits could indicate they’ve fallen on hard times due to the pandemic.

2. Your Customer Claims They’ll Pay as Soon as…

One hiccup here and there isn’t reason enough to sound the alarm. Everyone makes mistakes. Even the most loyal, organized customer can accidentally pay a bill late from time to time. But they’ll usually own up to their mistakes and make sure they don’t repeat them.

It becomes worrisome, however, when your customer always has an excuse at the ready. While their excuse may not be as see-through as their dog ate the invoice, they may offer increasingly bizarre reasons as the months go on.

Learn to trust your gut; if you think they’re lying about why they can’t pay their bills, flag their account and consider your next deal carefully.

3. They’re in an Industry Worst Hit by the Pandemic

The coronavirus pandemic has had a devastating impact on the U.S. economy at large. However, some sectors are suffering more than most. The numbers show that hospitality, food, travel, and transportation are the worst-hit industries in the country.

If you service any of the following businesses, you may need help from a commercial credit collection agency soon.

• Airlines
• Casinos
• Cinemas and Theaters
• Cruises
• Hotels
• Restaurants
• Retail
• Sporting Arenas

Don’t worry if your clients belongs to one of these industries. Their spot on the list does not guarantee they’ll run into issues, but if they do, we’re here to help you get paid in economic uncertainty.

4. Rumors about Your Client Begin to Circulate

Word gets around, especially in the business to business markets. One of your customers might spill the beans and let you know another customer is facing difficulties.

Take everything you hear from the rumor mill with a grain of salt, but still consider them carefully. While there may be no truth in these rumors, they could act as an early warning system. Keep your eyes peeled for more information. If they end up skipping out on another bill, contact us, one of the most successful business to business debt collection agency in the country.

5. Their Online Reviews Have Taken a Nosedive

You know who else talks? Customers.

Like most businesses, your client will likely have an online presence, which means their customers can leave reviews about their products and services.

As a commercial credit collection agency, we’re no different. You can search our name online and bring up reviews from Google, Business.com, and the Better Business Bureau. Here, our no-complaint policy has earned us an A+ rating on the BBB. We’re happy to boast these kinds of reviews from customers and debtors alike.

If you run a similar background check on your client, they may not have the same reputation. Consistent bad reviews could indicate they’re not delivering on the products or services they promised, meaning they’re on a downward projection. In the worst-case scenario, your client may be operating on borrowed time.

6. They Say the USPS Lost Their Check

The USPS is an easy scapegoat right now because of the massive operational reforms that have slowed mail delivery. While these deep cuts affect service across the country, reports show postal carriers are working hard to keep up with demands. 

If you still accept checks as a form of payment, consider switching over to a digital accounting program soon. These services streamline the invoicing process for you and your customers both. Best of all, there’s no way a tardy customer can claim their check is “lost” in the mail.

7. Their Payments Bounce

 A payment can fail, even if you’ve made the switch to an electronic payment system. This may happen for a variety of reasons:

• Your client doesn’t have enough money in their account to complete the transaction
• They’ve closed the account
• A hold has been placed on their account

If a failed payment ever happens to you, ask that they submit a new payment right away and keep a careful eye on their payments in the future.

8. You Can’t Reach Your Client

It’s tough when a client won’t answer their email or pick up the phone, but what can you do when your customer reverts to these childish avoidance techniques?

Sometimes, the only way to prove you’re serious about your cash flow is by sending their account to consumer collections. An avoidant client won’t want to ignore a commercial credit collection agency when we come calling.

We can find them even if they’ve done their best to skip town. As one of the top commercial collection agencies in the country, we’re one of the few companies that have a private investigator on staff. This experienced professional taps into traditional records and new online databases to locate hard-to-find commercial clients.

9. They Have a High Turnover Rate

In some situations, employees act as your canary in the coal mine. If your client’s staff are dropping off in droves, there could be internal issues at play, or a high turnover rate may indicate your customer is facing significant financial problems and can’t pay their staff. 

10. Your A/R Staff Are Frustrated and Overworked

Believing your A/R department can do what we do is number one on our list of 6 misconceptions about debt. But this is simply not the case. Your A/R department doesn’t always have the time or experience to deal with overdue accounts, which can lead to burnout.

Here at Summit A*R, our sole focus for the past 28 years has been debt recovery. When you tap us into this part of the A/R cycle, you can rest easy knowing that one of the top commercial collection agencies is on the case. More still, our involvement relieves staff to focus on other tasks.

Is Commercial Collections the Right Next Step?

Do any of these warning signs sound familiar? Whether it’s just one or all ten, contact us for help. We can discuss your next steps should an account fall into delinquency.