Let’s have a look at some of the biggest reasons debtors don’t pay your account. A lot of debtors don’t pay their accounts because there is a simple dispute that the creditor might feel is the debtor’s way of wasting time or prolonging payment.
This might be true, but in most cases, we deal with the debtor feeling bullied into paying for an account they might have a simple query on. For example: ‘The description of the item on the invoice is incorrect’.
The creditor possibly feels the debtor is wasting time and gets frustrated so hands over the account for collections. The debtor on the other hand possibly feels unheard and frustrated that the account is handed over when in fact the dispute was never about paying or not paying but merely an error that needs to be amended. Sounds simple, doesn’t it?
Why it’s important to resolve your debtors’ queries:
- The longer an account remains unpaid, the less likely you will be successful in recovering the debt.
- You end up ruining your business relationships.
- Resolving the query could result in payment.
- Disputes make it more difficult for collection agencies to do their jobs as the debtor is now annoyed by the fact that the account is handed over and ultimately refuses to speak to the collector.
- Generic letters are likely to be discarded or ignored if a dispute is not resolved and ultimately no recovery is made.
Why it’s important to listen to debtors and understand their situations:
- Forcing debtors into payment plans they can’t fulfil helps nobody.
- Trying to force a debtor to pay more than their cashflow allows just stalls the collection process and further degrades the relationship between the collector and debtor.
- Finding out the reasons why a debtor hasn’t paid goes a lot further than throwing around accusations. Once you understand why the debtor isn’t paying, you’ll be far better prepared to work with the debtor until the account is paid in full.
- Harassing collection efforts do not work! They alienate your debtor and are highly unethical furthermore, harassment or making threats to debtors is illegal and very strictly enforced.
- Firm but courteous collection efforts are more likely to produce fruitful results than angry, emotionally charged ones. If you are fair and level-headed with your customers/debtors, they will be much more willing to work with you.