THE WARNING SIGNS
Breaking terms: A new customer does not pay in accordance with the terms of the sale or contract, or an established customer is slow in paying.
Avoids contact: Never in, does not return your phone calls.
Broken promises: Promised to pay, but the check did not arrive.
Late dispute: Only started to dispute the debt when client began to demand payment via letter or by telephone.
Partial payment / short pay: Makes partial payment of an invoice or invoices, without prior agreement, or short pays invoice(s).
Management turnover: Turnover of executive personnel (i.e. CEO/ President/CFO); company shows signs of instability.
Financials unavailable: Financial information was refused or client requests new information and does not receive. Any one of the above warning signs should be a signal to intensify collections efforts!!
BEYOND THE WARNING SIGNS ARE THE DANGER SIGNALS
The “left messages” syndrome: The now potential debtor/customer has not responded to or returned your numerous phone calls.
The “broken promise” syndrome: Customer has now committed to sending payments on numerous occasions, and no payment has arrived to date.
No personal guarantee: Company appears to be experiencing financial difficulties. Customer is now refusing to sign a personal guarantee.
Cash flow problem: Customer claims a lack of funds is now the real reason for lack of payment.
COD: Insufficient fund check on c.o.d. purchase; customer is now refusing to honor payment.
Final Demand: Demand sent as last ditch effort to collect on outstanding invoices to customer. No response, no payment. Any of the above danger signals require the immediate attention of Walker & Weiss.
AND FINALLY, THE “DEATH” SIGNS
Mail returned: Moved, no forwarding address, addressee unknown, mail refused.
Phone disconnected: No longer a working number, no other address provided
Bankruptcy notice: Self-explanatory, customer is no longer in business, creditors line up with the bankruptcy court in order to seek restitution, of which, in many cases creditors are not paid.
The Value of Accounts Receivable Dollars
Numerous studies as well as our experience indicate that the longer you wait to respond the less you are going to collect: