Credit and Collection News : A Division of Elsos



How to Make Receivables Harder to Collect

posted on 2014-05-11 by Dean Kaplan

We don’t know any­one who actu­ally wants to make it harder to col­lect invoices, but here are some com­mon issues that result in this scenario.

Repeat­edly Invoice Incorrectly

Develop a rep­u­ta­tion with your cus­tomer for send­ing invoices with wrong infor­ma­tion is a great way to end up at the bot­tom of their list to process.  Regard­less of the cause (e.g. wrong prices, back orders, miss ship­ments, incom­plete pur­chase orders), the result is delayed payment.

Don’t Lis­ten

If you won’t lis­ten to them, why should they lis­ten to you?

Delay Resolv­ing Disputes

You can­not col­lect while a dis­pute is unre­solved.  Regard­less of the rea­son (too busy, can’t get inter­nal coop­er­a­tion, can’t locate doc­u­ments, etc.), the longer it takes you, the longer your pay­ment gets delayed.  Wait long enough, and it becomes even harder as the nec­es­sary infor­ma­tion, includ­ing people’s mem­ory of the trans­ac­tion, is more dif­fi­cult to compile.

Auto­mated Nasty-grams

Keep send­ing auto­mated, increas­ingly nasty let­ters on dis­puted invoices that you haven’t had time to deal with to resolve.  Keep remind­ing them of your fail­ure to address the issues while threat­en­ing  to take esca­lated action against them.  They’ll remem­ber this unpleas­ant treat­ment long after the par­tic­u­lar dis­pute is resolved.

Bounce Them Around Your Company

“I can’t answer that ques­tion; you need to talk to _____”.  Make it their job to sort things out with the var­i­ous peo­ple in your company.

Treat All Cus­tomers The Same

Sure, poli­cies and pro­ce­dures are required for effi­ciency and effec­tive­ness.  But not all cus­tomers are alike.  Refuse to develop dif­fer­ent approaches, or even poli­cies and pro­ce­dures, and you can end up with repeated pay­ment issues.

We get a large num­ber of claims at our B2B col­lec­tion agency that reflect one or more of these issues.  We’ve become experts at dis­pute res­o­lu­tion with resul­tant debt col­lec­tions while try­ing to pre­serve vendor-customer affin­ity.  We under­stand that for clients where this is a rare occur­rence, turn­ing it over to us for the inten­sive time com­mit­ment and exper­tise required makes eco­nomic sense.  But, we have con­cern for our clients and their long-term cus­tomer rela­tion­shipsif we see this too often.