How To Deal with Customers that Refuse to Pay..

how to collect debts


If the current economic conditions weren’t tough enough for your business already, add to that the fact that you may have outstanding accounts from customers who are also feeling the heat. While you may be able to feel their pain, the impact of their outstanding debts could be devastating for your business.

That’s why it’s important that you have a debt recovery plan that is effective and yet keeps the relationship with your customers civil. At some point you’ll find yourself in the position of chasing payments, so here are some tips for doing so efficiently and with the least amount of stress.

Be proactive

Every business must have a clearly defined policy for dealing with late payments. This will not only help to avoid late payments in the first place, but will help you collect debt faster so you save on time and money. The following are the three major ways you can be proactive with your collection process.

    Set a clear credit policy. From the very beginning, be clear with your customers about what you expect when it comes to credit. For example, if you make it known that you will start the collection process after 30 days, then your customers are far more likely to comply and pay before then. You should also outline the steps you will take after the 30 days so that customers aren’t surprised when you start contacting them.
Get a signed contract. A credit contract will work wonders for recovering payments on time, and it doesn’t have to be complicated. Simply state what you’ll provide and when; what the customer must pay and when; how disputes will be settled; and what penalties there will be for late payments.
Conduct a credit check. Simply running a credit check on would-be customers is a great way to avoid this situation as you can make a more informed decision about the extension of credit.

Have a sound collection process

Having a sound collection process will benefit you in two major ways: first, it ensures any mistakes in collecting payments don’t happen on your end; and second, it helps customers to see that the collection process isn’t anything personal.

Issuing your invoices promptly should be the first step in your process. Additionally, make sure you monitor your accounts receivables regularly so you know what stage of payment each customer is in. Next, have a standard reminder that’s issued just before a payment becomes due so that your customers have a chance to make their payments. Last, have a plan for dealing with a variety of individual circumstances, because you are bound to have customers with a reasonable excuse.

Chase overdue accounts immediately

The collection process should begin the day after a bill is due. The longer you wait to contact the customer, the less likely the bill will be paid. Call the customer directly to talk about why they haven’t paid. Remember to be civil during contact, however, because the non-payment could also be a result of something you have done wrong. Depending on the result you get from talking to the customer, you may also consider ceasing the extension of credit to them until they have paid up.


Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386