If the debtor WANTS to pay, but just can’t … a Case Study

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If the debtor WANTS to pay, but just can’t … a Case Study

Our client, the creditor, is an accounting firm.

* All “standard” reminders had been ignored.
* Phone promises to pay not kept.
* Even a final “Letter of Demand” went unheeded.


The accountant who knew the client advised “He’s got a serious cash-flow problem”. We suggested we offer them a payment plan that the debtor COULD afford.


This is what we sent on Tuesday, 02 October …


Dear Mr Smith,

Outstanding Fee Balance – $9,125.00

I’ve been advised that you may prefer to settle the attached invoices by way of monthly payments rather than trying to finalise them all at once.

If that IS the case, are you in a position to pay them according to the following schedule?
               amount                    to be paid by
               $2,500.00                20 October 2018
               $2,500.00                20 November 2018
               $2,125.00                20 December 2018
               $2,000.00              20 January 2019

If
1: this will provide you with some assistance and you are, please remit the first instalment as above.
2: you are not able to pay in the manner set out above, please contact me to let me know what you are able to manage as I do have to report to the Directors later this week and they are likely to suggest that we revert to policy in the absence of any reply from you.

I hope this helps.


This is the reply received 2 days later


Hi Andrew,

Yes these can be adhered to without any issues.
If we can pay them earlier we will do so.

Thank you



THE MORAL OF THIS CASE STUDY


If the debtors intent to pay is good but the ability to pay in full is not, consider going to them with an offer that they CAN afford. One that YOU would have accepted if they had originally come to you with that offer.

They WILL thank you for it and, more than likely, keep to that arrangement.

By | 2018-10-05T04:04:08+00:00 October 5th, 2018|Uncategorized|0 Comments

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.

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