What are the signs your customer isn’t going to pay?
Did you know that many debt collection cases could have often been prevented? In practice we regularly see that there were signals early on that a customer was not going to pay. Curious what you should pay attention to and how you can respond to this? Our collection specialists and attorneys have happily provided some useful tips and that your customer isn’t going to pay.
1. Late payments
Does your customer only pay invoices after the expired date? Often this is a sign that the financial administration of a company is not in order or that there are not enough resources to pay the invoices on time. Especially if your client used to pay the invoices on time. You should therefore contact your customer to discuss this. This way you may be able to find out where the changing payment behavior comes from.
2. Changing purchasing behavior
Does your regular customer suddenly reduce their order with you either in volume, value or consistency? This changing behavior is a sign that something is wrong, and your company should act. Perhaps your customer is less satisfied with your services or delivered goods? But it can also be that your customer is not doing as well financially and therefore they are beginning to place fewer orders with you. In any case, it is a reason to contact your customer quickly to discuss this.
3. Request for deferment of payment
Is your customer asking to change the payment period or has your customer made a proposal for a payment arrangement? For good customers, it is easy for you to be flexible about payment. But be aware. this can be a signal that your client’s financial situation is not currently healthy and therefore your customer isn’t going to pay. If you are happy to change the payment period or make a payment arrangement, always ensure they are clear and recorded in writing. In addition, consider the lenient handling of the payment term as an incident, and certainly don’t make it a habit to postpone payments from customers.
4. Change of staff
When a company appoints new management, this can be a signal that things are not in order within the company. Even when there are many staff changes, this can be an indication that there are difficulties within the company. So be alert to this. It could be a sign that your customer isn’t going to pay.
5. Communication is poor
When you conduct business with a company, it is important that communication is mutual and friendly. Have you noticed that it is becoming more difficult to get in touch with the company? For example, because the company is difficult to reach by telephone or that emails are not answered or answered late? These too can be a sign that the company is not doing well financially.
Do you recognize one or more of these signals? Are you worried your customer isn’t going to pay? Do you feel that your customer may have financial problems? Then contact us for more information. We are happy to give you honest and clear advice on how to best deal with non-paying customers.