Bad Debt
Are you struggling with your clients not paying on time or at all? This can be detrimental to any business, not to mention dire to a smaller business. Here are five red flags to look out for:
- Not answering your calls
If a client has an outstanding account that you have addressed with them and after having addressed the issue, they are avoiding your phone calls, this is a red flag. It may be innocent, but to be honest, normally if you see a client calling you and you are busy, you call back. This is one of the first red flags you need to be aware of when dealing with a slow paying client.
- ‘Please re-send the invoice’
When a client uses this an excuse for not paying on time, it is a red flag! ‘I haven’t paid yet because I didn’t get the invoice, please re-send it’ is the excuse we hear most often. With these clients make sure to ask them to acknowledge receipt of your email annexing the invoice or add a read receipt to all mails.
- ‘Can’t talk, I’m in a meeting’
How often have you answered a call whilst in a meeting, just to inform the person on the other side that you are in a meeting? This is one of the most common responses we get when calling debtors. If your client is not taking your calls or keep insisting, they can’t talk about their outstanding accounts because they just ‘walked into a meeting’ it is red flag. If the person you normally deal with keeps making excuses or avoiding your calls, rather speak to someone in their accounts department regarding the account as this might also save the working relationship between you and the client.
- ‘We had a problem with our internet’.
If a client has not paid your account and they use this excuse for not having paid, it most definitely is a red flag. Every time payment is due the internet is off? To be fair, this might be true on one or two occasions, but how will their business operate without telephone lines or internet? It seems unlikely. Technology and payment methods have become so advanced that you can easily make a payment from your cell phone in less than 2 minutes.
- ‘I can’t hear you, hello?’
Probably the oldest trick in the book. If a client who owes you money can’t hear you over the phone only when there is an account due, this is a major red flag. Chances are they can hear you; they just cannot pay you.
In conclusion, if you notice any red flags, be cautious, ask deposits if necessary or even payment upfront. Times have changed and a lot of businesses have implemented these procedures. Can you afford not to get paid?
