Most business owners, executives and salespeople simply don’t recognize the moment that an account they are selling to goes bad. When an account goes bad, there is usually a distinct possibility that the creditor – that’s you, if you are the business owner, may not get paid. To help our clients avoid collection problems before they occur, we developed a list of the Five Clues Your Customer is Not Going to Pay You. Any one of these behaviors individually, or in combination, should be a red flag that a rogue customer could suddenly impact your revenue stream.

Let’s face it, most business people don’t want to admit that there is a receivables problem, even when the clues are right there, staring them in the face. But if one or more of these scenarios occurs, it is time to act.

Five Clues a Customer is Not Going to Pay

While this list is not exhaustive, these have been the most common red flags they have identified when clients come to see us for assistance:

1.    Sudden drop in communications.

After having had a wonderful business and personal relationship for a long time with the customer making regular payments, the customer suddenly stops returning telephone calls and/or de-friends you on Facebook and unfollows/blocks you on Twitter.

2.    New dispute over old invoices.

When you approach your customer about overdue invoice(s), the customer now has quality issues with the product sold, the price charged and/or makes new claims of shortages.  If there has been no prior customer claim regarding of any of those issues, within a reasonable time after delivery of the goods or services, what does that indicate?  The answer is often an unwillingness or inability to pay.

3.    Broken promises of payment.

When a customer attempts to extend payment terms after the fact, it should be seen as a red flag. The customer patter often sounds like a promise of payment “next week,” “after a receivable clears” or “to coincide with the next shipment.”  Broken promises can also take the form of “I forgot to mail that” or “my Accounts Payable person was on vacation.”  A wary businessperson should see these empty promises of payment as nothing more than smoke screen to mask a cash crunch at the customer’s place of business. 

4.    The C.O.D. check has been dishonored.

Despite a Credit Hold because of non-payment of older invoices, the Credit Department might make the business decision to continue to sell to a delinquent customer. Arguably both parties need each other, badly.  In an effort to get a large client back on its feet with the prospect of future profit, the creditor might agree to new sales, but only on a “Cash On Delivery” basis.  If that C.O.D. check is dishonored, that should be the last sale to that customer.

5.    The phone is disconnected and mail is returned.

Although this might seem more like common sense than a clue, even when unable to establish any form of contact with the delinquent customer, it might not be too late to collect from them.  Businesses may close, but they don’t disappear that easily. 

One last thought. Don’t walk away from bad debt, try to collect on it. Sue in Small Claims Court if you don’t want to engage a professional to collect the debt for you.  You never know what might happen if you take affirmative action.

Elliott Portman is a creditor's rights attorney with Portman Law Group, P.C. who regularly engages in creditor’s rights law and debt collection matters.  Mr. Portman is Counsel to Rosenthal & Goldhaber, P.C. and can be reached at e.portman@PLG-NY.com or 631-979-8500.

Views: 17

Members

Latest Activity

True Mechanical Corp posted a blog post

The Future of HVAC has arrived and that means 50% less electric.

The Future of Heating and Cooling your Home means a reduced HVAC electric use of 50 to 60% The Future of HVAC just made a big leap forward. The newest technology and most cost effective HVAC options have been introduced in just the past 6 months.…See More
yesterday
David Gussin posted a blog post

516Ads.com - Nassau Luncheon, North Shore Breakfast, Panera Suffolk, Ramada Plaza, 718Ads @ TRIO, Recap/ Reviews, Happy Sunday Morning, Quick Hits, Quote...

516Ads.com - Nassau Luncheon, North Shore Breakfast, Panera Suffolk, Ramada Plaza, 718Ads @ TRIO,  Recap/ Reviews, Happy Sunday Morning, Quick Hits, Quote...Hello everyone!  LOTS of events, LOTS of info, LOTS of good things happening!!! Hope to see…See More
Sunday
David Gussin posted blog posts
Friday
David Gussin posted blog posts
Jan 10
David Gussin posted an event
Thumbnail

516Ads/ 631Ads - Nassau Business Luncheon @ Nautilus Diner! at Nautilus Diner

January 16, 2018 from 12pm to 2pm
516Ads.com & 631Ads.com Nassau Business Luncheon Tuesday January 16,  2018 12PM @ Nautilus Diner - 5523 Merrick Rd, Massapequa Park, NY 516Ads & 631Ads is proud to team up with event sponsors…See More
Jan 9
David Gussin posted a blog post

COMING UP NEXT: BUSY THURSDAY 12PM Suffolk Luncheon, 6PM North Shore Towers ...

516Ads.com & 631Ads.com Suffolk Business Luncheon Thursday January 11,  2018 12PM @ AlaTurca Mediterranean Restaurant & Catering 691 Route 109, West Babylon…See More
Jan 8
Steven Warshaw RealtyConnectUSA updated their profile
Jan 6
Steven Warshaw RealtyConnectUSA is attending David Gussin's event
Thumbnail

718Ads - Kicking Off 2018 - FREE Networking Night at North Shore Towers & Country Club

January 11, 2018 from 6pm to 7pm
718Ads - Kicking Off 2018 FREE Networking Night Thursday January 11, 2018, 6PM @ North Shore Towers & Country Club 27240 Grand Central Parkway, Floral Park, NY…See More
Jan 6
David Gussin posted blog posts
Jan 6
Lisa Albinowski Coldwell Banker posted an event

Calling All Boomers & Seniors: Housing Options & Issues at Middle Country Library

January 12, 2018 from 10am to 12pm
Lisa Albinowski, Seniors Real Estate Specialist  & Sharon Ritter of Care Patrol: Winter 2018Housing Options & Issues will focus on alternatives to traditional family housing that can help older adults transition to a new, less stressful…See More
Jan 5
Deana Caraballo might attend David Gussin's event
Thumbnail

516Ads/ 631Ads - FREE Networking Night @ Ramada Plaza at Ramada Plaza

January 25, 2018 from 6pm to 8pm
516Ads/ 631Ads Ramada Plaza: FREE Networking Night Thursday, January 25, 2018 6PM @ Ramada Plaza516Ads & 631Ads is proud to team up with…See More
Jan 5
Deana Caraballo posted a status
Jan 5

© 2018   Created by 516 Ads.   Powered by

Badges  |  Report an Issue  |  Terms of Service