Like it or not, as businesses, we all take on customers that are not going to pay-or they pay very late. Because of this, we are forced to make other arrangements to cover our expenses from time to time, leaving us in situations of negative cash flow. For a small business, it’s all the more troubling when this happens.
Collection agencies are often asked, how can I spot a customer that is going to pay late-or not pay me at all? There are several signs that a business can spot early on and after the time of service.
Early on, if you’re a business that checks credit, you’ll get a pretty thorough snapshot of a person’s ability to pay you on time. A past history of delinquent payments or credit scores that are less than desirable may tip off a business that a customer could be a credit risk if not handled properly. Past payment history can predict the future.
Once a bill goes unpaid, a customer that makes promise to pay and does not keep those obligations is another clear sign that something may be wrong. Repeated promises to pay with no action is a tell tale sign you may have an issue on your hands.
Check’s in the mail; We’ve all heard that…But it happens to businesses every day. Interesting, you said the check was in the mail but it has not arrived yet… Definitely a red flag.
Returned checks and credit card payments that have not gone through are another indication that there is a problem on the horizon that you’ll need to deal with.
Communication breakdown. If all communication seizes including any type of written or phone communication, this is another clear sign you are not going to see payment any time soon.
And if a customer’s phone is disconnected and their mail is being returned to you, it is past time to take a more assertive action. At that point, it is time to get a collection agency involved for you because it should be clear what the customer’s intentions are.
Check out our video for more insight into this topic.
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