Saturday, January 24, 2009

Money, Money, Money, Money.... Money!

Running a business is a ton of work but very gratifying. One of my big tests comes however, when customers do not pay. I personally do not understand how a person can purchase something from a supplier and then not think there is an obligation to pay for the material. I suppose all business go through this but I feel taken. It hits me as theft.

So what do the experts say?

  1. Have a credit policy in place: and get a signature before doing any terms.

  2. Do not ignore overdue bills. When it is getting close to due have a warning light go off.

  3. Re-bill promptly with late charge added. 1.5% is what I charge.

  4. Pick up the phone. (It is your money and the money of your employees that is at stake)

  5. Never apologize when you call or write. “Hi ____. Show me the money!”

  6. Be friendly. Yeah, yeah, yeah!

  7. Ask for the full amount. And when they give you part of it don’t congratulate them.

  8. Never negotiate the amount, just the terms. You know like pay now, pay now, pay now.

  9. Take them to small claims.

  10. Sick the creditor dogs on them. Something is better than nothing. You already have lost that amount by this time find a company that only gets paid a percentage of what they collect.
    (some of this came from New York Life)

Always remember you have to pay the bill whether or not your customer pays. It is your promise to the manufactures that give you terms.

I am glad for the majority of people that their word is honorable. Doing continued business with people like that is totally worthwhile and enjoyable. Some of my best friends today are customers that I purchase from or that purchase from me.

Tell me what you have done to collect money from dead beats in the comment section. I would love to hear from you.

Jon Mullender

"Primetime all the time!"

1 comment:

  1. That's funny. My wife and I are talking about a non-paying customer even as I read your post.
    Persistence seems to do the trick.
    Every once in a while we have our lawyer write a letter or threaten collections (I'm not sure we have ever used collections, though).
    Over the years, the vast majority of people have paid. There were a few that we totally lost. It's bound to happen I guess.

    I would think that it would be well within understanding that you would ask for the material to be paid for up front.