3 Techniques to Collect Receivables from Difficult Customers

Even the most careful company will have an occasional customer who is unable or, for whatever reason, refuses to pay money owed the firm.  It might be someone with a long history with the company or someone with no track record at all. Either way, it’s important for the business to collect the money that it is owed.  

Of course, there are times when a simple breakdown in communication is the case. A business might assume that a vendor or a customer is refusing to remit what’s owed, but it might turn out that an honest error was made. In those circumstances, the situation can often be resolved quickly and with a minimal amount of stress.

There are other times, however, when a debtor simply refuses to pay what is owed.  In such cases, a number of different approaches can be tried. Finding the right approach to achieve the desired result can be a simple matter of trial and error.

The “Honey” Approach

In business, the old adage that one can catch more flies with honey than vinegar still applies. When a customer who owes money receives payment inquiries from a business, that customer will sometimes automatically go into a challenge mode, being confrontational and abusive. Often this behavior actually stems from being embarrassed by failing to live up to his or her obligations.

Rather than responding in kind by being equally rude or threatening, the person attempting to collect the debt can remain calm — even sympathetic. Sometimes, a situation can be defused by simply acknowledging that extenuating circumstances may be why the debt is not being paid. By showing sympathy and keeping anger to a minimum, the debt collector can sometimes set up a payment plan that allows the debt to be paid off in a timely manner.

Pass to Professionals

 At other times, customers will continue to refuse to pay what they owe.    When that happens, the only recourse is sometimes to pass the account receivable over to a professional debt collection agency. The agency is trained to deal with people who are not paying their bills, and has extensive experience with all sorts of individuals and attitudes. Professional debt collectors have seen it all and know how to deal with it.

There is a price to be paid for this approach, however.  Collection agencies charge a sizable percentage of the money owed once the customer has paid.  The trade-off is that the business doesn’t have to deal with the customer and any abuse that might arise.

Small Claims Court

Depending on the size of the debt owed, it might be wise to take the matter to Small Claims Court. Some fees are involved (usually a filing fee with the court), but the business owner does not have to hire an attorney. Any fees incurred are typically small, and resolution occurs quickly — usually within 1 to 2 working days.

In the end, as long as the business representative remains calm, does not make any threats, or behave in an unprofessional manner, collecting the monies owed from even the most difficult customer is possible. However, there are also times when the best course of action is to simply write the customer off and never do business with him or her again.

About the author

Kristen Gramigna is Chief Marketing Officer for BluePay, which helps businesses of all sizes accept credit cards. She brings more than 15 years of experience in the bankcard industry in direct sales, sales management, and marketing to the company and also serves on its Board of Directors.


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