A Case Study (Part 1) – too many broken payment arrangements.

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A Case Study (Part 1) – too many broken payment arrangements.

when enough's enoughThe purpose of this case study (outcome not known at the time of writing) is to show the reasoning behind the steps taken to recover an old account payment.

BACKGROUND
The account was well overdue. The debtor had been telling the Accounting Firm Partner that he would pay but he hadn’t paid anything. Zilch. It had been ‘dragging’ on for several months. No money. It’s a large debt. The Partner had now “had enough”.

PRINCIPLES USED
1: A new name, unfamiliar to the debtor. A new broom. Removes the comfort zone for the debtor. Don’t have someone? Try this.
2: Start the new follow up with a tough, no nonsense approach for ‘old’ accounts and then you can lighten the atmosphere (become friendlier) if it looks like the debtors intent to pay is there and promises are kept. (The opposite of chasing ‘new’ debts — see here).

Monday, 13th February (2.31pm) we sent an email to a debtor.
Jonathan,
Your account has now been given to me as
1. payment is now severely overdue, and
2. several payment arrangements have been accepted by the firm but not maintained.

It is now most important that you either
· settle the full remaining balance ($8,615.42) OR
· contact this office
by 2.00pm of Wednesday this week, 15 February.

This is my first and last attempt to contact you.
I will revert to policy to recover full payment plus costs if neither of the above two occur by the specified time.

These are the subliminal/hidden tactics applied.
* No “Dear” in the salutation – removes any softness from the get go.
* “given to me” – someone higher up in the “Collection Hierarchy” is now involved.
* 1. and 2. – bullet points of the reasons for this email.
* two options given to the debtor – settle or contact us.
* Unusual but very specific deadline given.
* Using the Pontius Pilate approach. An “I don’t care any more” attitude. – “first and last“.
* “revert to policy” – fear of the unknown
* “plus costs” – debtor doesn’t want to owe MORE!
A cc of this email was sent to a firm of solicitors for added impact. It uses Curiosity.

So, what happened?
Wednesday, 15 February (7.41am) – the ‘deadline’ day.
We received an email from the debtor. It said …
good morning,
I’ll call you in a couple of hours at this number
+61 2 1234 5678 right? I’ll ask to speak with you.

Two Other Case Studies and their outcomes
The Coffee Wholesaler
Bob The Builder

>>>See (Part 2) here.<<<

By | 2017-07-13T08:51:39+00:00 February 15th, 2017|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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