Creditors' Rights 28
Q: What should I do if my customer does not pay when due?
A: Typically, a plan is send out a reminder letter when the account is 15 days delinquent, another letter at 30 days, a phone call at 45 days, a letter and a phone call at 60 days. If there is no payment by then, consider raising the bar and referring the debtor to your company’s collection department, a collection agency or a law firm that will remind the debtor of its obligations more firmly. The worst plan is to make it up as you go along or hope that things will somehow improve. Remember, delinquent accounts rarely get better with age.
A way to avoid sending letters and making calls is to anticipate the possibility that the paying customer will not be when due and create a credit policy. The policy will benefit the on-time payers by making it clear what they have to do to BE on-time payers and keep their credit clean. For those debtors who find paying on time difficult, you might ask for an advance deposit and final payment upon receipt. Other options include letters of credit, guarantees and progress payments. There are many options which can be offered if you are prepared in the right way.
*Learn more about credit policies and the Payment Gap with Bob Bernstein’s new book, Get P.A.I.D.TM A Guide to Getting Paid Faster (and What to Do if You Don’t!) at www.getpaidsystem.com
