bob – the builder (part 2)

Home/case studies/bob – the builder (part 2)

bob – the builder (part 2)

this is part 2 of a live Case Study. click on the picture for the full story bob – the builder is a real, live Case Study. I am recording what does or doesn’t happen so that you can see the thought processes behind an effective collection strategy and how the three principles of effective account collections are applied in real life.

To see all of bob – the builder as it unfolds/unfolded click here.

 

 

 

Part 2

The 20th January came and went and Dave Developer (the debtor) did not respond or react in any way. Today (29th January – the day before the first “pay by” date) we are sending Dave an email and letters with the following wording.


————————————————

Dear Mr Developer,

My name is Michael Todd. I am a Financial Consultant. I am writing to you on behalf of my client, Bob-Builder Pty Ltd.

I understand that

  • there is a balance of $60,000.00 outstanding to Bob-Builder Pty Ltd
  • Bob Builder wrote to you on 15 January offering to accept monthly payments of $10,000 to help you to extinguish this debt in view of your long-standing relationship
  • you have not yet responded to his letter, and
  • the first instalment ($10,000.00) of this offer is due on Friday, 30 January 2009.

Please organise to deposit the first instalment directly into Bob-Builder’s bank account so that it is received on or before the close of business on Wednesday, 04 February. If you have queries of any sort that will affect your ability to be able to do so, please contact either myself or Bob Builder directly. I may be contacted through any of their contact details.

If you should decide not to make the payment as above then the offer to accept payment of the balance by monthly instalments will be withdrawn unless you have contacted either Bob Builder or myself beforehand to discuss alternatives. The original of this letter has also been mailed to you at 1 Any Street and to PO Box 1234, Sydney.

We look forward to hearing from you.
Regards,

Michael Todd

————————————————

In my email to Bob, I told him …. This letter is deliberately non-threatening (other than threatening to withdraw the offer to accept payments monthly). I want to draw him out and by starting like this I can gradually increase the pressure on him to do something. If he doesn’t get in touch with you, I’ve diarised to contact him again on Friday next week. This will seem extraordinarily slow to you. I do appreciate that, but, the debt’s been overdue for a very long time and, unless you want to sue, this is the best approach.

————————————————

The Strategy
A new name, one unknown to the Debtor is now in play.
The light threat of withdrawing a payment plan may draw the debtor out. The letter is fairly formal; the language reflects this.

What Next?
So, what will happen next? I am guessing nothing. Nothing will happen. But we’re starting to create a pattern of regular follow up and we are applying Principle #3 – Become very hard to ignore. Until next time!

By | 2017-09-20T13:13:06+00:00 January 29th, 2009|case studies|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.

Leave A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.