By Andrea Schlack & Robbie Burch

Over the past many months we have discussed practices for building profit with good credit granting policies, but what about the collection process? You have followed the rules, you performed due diligence, the risk assessment was positive and terms were granted. You determined how much could be risked safely, you completed the job and invoiced the customer timely, and you took steps to ensure your paper-trail was maintained properly —and you did not get paid!

Non-payment is a fact of business, it will happen. It is frustrating but unavoidable, and not all non-payments are equal, nor should they all be treated thusly. Just like granting payment terms – facts matter and this too holds true with a non-paying customer…depending upon the circumstances a determination needs to be made based upon the facts.

So what happens when the invoice becomes past due, and how do you make the ‘possible’ –‘probable’?

Be proactive, get engaged, and don’t jump to conclusions.

Don’t assume payment in on the way. Issue your first past due notice when your money has not been received as agreed. Do follow up notices as needed, but always remember a delinquent customer may just ignore the written demand, therefore

Establish phone contact with the customer shortly after you issue the past due reminder and ask for payment. Keep a record of all calls and letters.

Let the customer know your concerns. State clearly how their late payments could jeopardize their credit line.

Inform the customer you expect payment immediately, but also be flexible enough to adjust for situational issues where extending additional time could be advantageous to building a good strong customer relationship.

Never agree to anything without knowing the facts, and recognize the difference between an unforeseeable anomaly and a customer taking unfair advantage.

Question what caused the delay and find solutions when possible to avoid similar circumstance in the future.

Under no circumstances should you simply agree to wait or continue to do additional work without knowing the facts –Only then can you determine the best solution, which of course, needs to be in writing.

Evaluate the profitability of future business with the customer and decide if the credit line needs to be adjusted or terminated.

Notify the customer timely and in writing of the actions you deemed necessary to protect your bottom line.

Time is critical, bad debts are not like wine –they do not improve with age –therefore sometimes the customer needs to be handled by the professionals — Printing Industry Credit Bureau can help when the unforeseeable becomes the unfortunate non-payment.

PINE has partnered with the Printing Industry Credit Bureau (PICB) to provide expanded credit & collection services for members. Learn about the new tools available at http://pine.org/credit-collections/