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Knowing what the
red flags are is the key to learning how to identify
accounts that should be placed for collection.
The sooner you act, the sooner you’ll get paid. If a debtor
is having trouble with cash flow you better consider that
they may go into default. You don’t know what may be going
on with their business, so just focus on getting paid.
Keep in mind that your invoice is competing with others that
beg to be paid as well. It’s true that the squeaky wheel
gets the grease. So, you need to know when to start making
some noise.
Whether the invoice is just coming due or it’s already 30
days past due, if you experience one of the following
scenarios you need to take action immediately or risk not
getting paid in a timely manner or getting paid at all.
The red flags include the following customer actions.
1) Submitting a marginal or incomplete credit
application
2)
Breaking credit terms
3) Voiding contact or not returning messages
4) Breaking a promise to pay or to return
product
5) Sending partial payment when full payment is
expected
6) Disputing product or service after shipment
is received or service is
rendered
7) Stopping payment on a check (or you receive a
Refer to Maker, NSF,
Account Closed)
8) Mentioning a “cash flow problem”
9) Requesting an increased credit line while
past due
10) Refusing to sign a payment plan with a personal or cross
corporate
guarantee
11) Reorganizing upper management or hiring outside
consultants
If you’ve experienced any of the red flags listed above you
need to consider placing the account for collection. Contact
Cohen & Pratt today and we’ll consult with you for FREE to
help you make a good decision on your next course of action. |
