DIAGNOSE - CREDIT MANAGEMENT
Diagnosing slow payers disease is painless. All you need remember is that your debtor is going to test positive for one of the following four symptoms.
1. Memory loss
2. Cash flow difficulties
3. Dissatisfaction
4. Poor Ethics
All you need to do is find out which symptom your debtor has by asking the question ‘I note your account hasn’t been paid. Why is that?’ You then deal with your debtor in the manner prescribed.
Symptom 1: Memory Difficulty
The signs your debtor is having memory difficulties is they respond along the lines ‘sorry I forgot’. Whilst we can imagine this happening as it does to most people at some time or another you need to ask ‘so when can I expect payment?’ Either you will receive payment as promised or you don’t. If you do then slow payers disease has been cured for now. If you don’t then your debtor has ethical difficulties.
Memory difficulty could also be when you have forgotten to use a correct order or job number on your invoice. Approval for payment may then be delayed.
Symptom 2: Cash Flow Difficulty
The signs your debtor is having cash flow difficulties is they respond along the lines ‘sorry things are really tight at the moment’. Whilst we are all in the same boat with this one your debtor had an obligation to discuss this issue with you before their account became overdue. You would therefore be entitled to negotiate a short term payment plan. For example you could say ‘sorry to hear that but unfortunately that’s not going to pay my bills. How about you pay half now and half next month?’ Drive you debtor into making a commitment and when they do get it in writing. Always expect a substantial payment immediately. Either you will receive payments as promised in writing or you don’t. If you do then slow payers disease has been cured for now. If you don’t then your debtor has ethical difficulties.
Symptom 3: Dissatisfaction
The signs your debtor is having satisfaction difficulties is they respond along the lines ‘sorry but I wasn’t happy with the job you did’. Like having a cash flow difficulty your debtor had an obligation to discuss this issue with you before their account became overdue. However what you need to do here is to fix the problem that your debtor has. They then have no excuse for not paying. Once you have fixed the problem you will either receive payment as promised in writing or you won’t. If you do then slow payers disease has been cured for now. If you don’t then your debtor has ethical difficulties.
Symptom 4: Poor Ethics
The signs your debtor is having ethical difficulties is when they don’t respond to your calls or letters or because they have not kept one of the arrangements made above. Clearly your debtor has an ethical difficulty in making payment. What you have done is diagnosed a full blown case of slow payers disease. Stop it from becoming fatal to your cash flow. Call in a specialist to help. Call in Cash Flow Doctors.
However if you are uncomfortable submitting a debt for collection at this stage we have provided a template final warning letter for you to use. Please feel free to use this letter but remember - follow up on your threat and call in specialist help. Call in Cash Flow Doctors.
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