When enough’s enough

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When enough’s enough

When just some of your debtors are NOT “doing the right thing” – that is, paying  — or (worse yet) not even trying to — send them an email like this ….

Dear Mr and Mrs Debtor,

Invoice for:               Their Company Pty Ltd
Invoice No/s:            12345
Unpaid Balance:      $4,320.00

In light of the current economic circumstances, the firm has had to look very carefully at its credit policy and it has become obvious that over the last twelve months more clients than normal have been taking far longer to settle their invoices than in the past.

This has made it difficult for us to operate within normal overdraft arrangements and resulted in higher interest charges. Also, most clients’ work is carried out over a period of time, so there is often a significant time delay between incurring costs and rendering an account compounding this issue.

As a result of the above, the firm is now contacting any clients with fees that are currently 90+ days overdue (where there are no queries or exceptional circumstances) and asking them to either
•        pay the overdue balance in full,
•        advise when payment may be expected, or
•        submit a reasonable payment offer for consideration by the Board
by the close of business of (insert date here … about 10 days after the date of your email).

We look forward to hearing from you shortly.

In February one year, we sent an email like that to selected debtors of a large Accounting firm.  All of the debts were extremely old.  As a direct result of that one email, 50% paid in full, 12% were written off (they were VERY old) and the majority of the rest made arrangements to pay – arrangements that the firm was happy to accept.  

Some debtors didn’t respond to that email at all.  I’ll post the wording of the follow up email that we sent to those in a future posting.

Points to Note
*  NONE went to Debt Collectors
*  NONE were sued.
*  Most debtors did respond.
*  The email had no “threat” in it.

This process was so effective because we wrote the bad news and (finally, eventually!) became hard to ignore.

By | 2020-02-20T01:09:59+00:00 April 4th, 2012|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.

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