How to stop debtors stalling

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How to stop debtors stalling

I have a complaint about your invoice, really I do. I just don't know what it is yet. (try this to stop debtors stalling)Shock. HORROR!! When you’re chasing slow payers, some of them will dispute something, anything in fact, but …. it’s only to stall paying. They really have no problem with your account – they just want to buy time. To pay later.

One of our clients is a National Accounting Firm. This is how we got one of their debtors to tell us what their complaint was or to “shut up and pay”.

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History
Invoice was sent out. Not paid on time. Two Reminder Letters sent out. Phone call reminder made. Client said “fee is wrong”. Many emails, letters and phone calls made, not to get the payment but to find out what his complaint was. “I’ll email my complaints”, said the client several times. He didn’t, so … we have just sent him this letter ….

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The letter sent

Dear Mr Bloggs,

Your Account

According to our records, the following invoices are unpaid.
—27/06/2008Fee 61234—$5,255.00
30/07/2008Fee 65678$1,590.00
24/12/2008Fee 69012$3,550.00

Three months ago, in a phone conversation with John Smith just before Christmas, you mentioned several concerns that you wanted addressed before you would be prepared to settle them. We have contacted you several times since then asking you to set out those concerns in bullet form either in a letter or by email so that we may look at addressing them for you.

In view of the amount involved and the serious ageing of those invoices we are now obliged to formally ask you, for a final time, to set out those concerns in writing so that we are in receipt of them by the close of business of Thursday, 02 April.

Please understand that if your account remains outstanding and we are not in receipt of your written concerns by the above date we will be obliged to revert to policy and pursue payment through other channels.

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Why this will work.
1: We are writing the Bad News – See speak the good news, write the bad news 
2: We are sticking to the ideal collection letter format that we looked at in bob – the builder (part 3)
——- paragraph 1 – state the facts.
——- paragraph 2 – say what you want the debtor to do.

——- paragraph 3 – tell the debtor what will happen if he doesn’t do as requested.
3: In paragraph 2, we gave the debtor an unusual “pay by” date. a Thursday. It infers that something will happen on Friday if he doesn’t complain or pay. Much, much stronger psychologically than “by the of the month” or “within 10 days”.
4: Fear of the unknown is being applied.

——- “revert to policy” – what’s that?
——- “Pursue payment through other channels” -what channels?

By | 2017-07-13T08:51:40+00:00 April 4th, 2013|wording|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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