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MAX'S
MYTHS and FACTS:
Myth: Collectors deal mainly with the
destitute and the downtrodden:
Fact: Collectors learn quickly that
consumers and business owners come from all walks of
life. In fact many people with debt are people like
you and me who happened to be unable to pay bills on
time for one reason or another. Although collectors
know that they must treat each person as an individual
and understand each person's or firm's specific situation,
they do recognize certain categories of those who experience
financial difficulties:
- People who don't understand the advantage of paying
their bills
- People who have had a change in their lifestyle
due to death, illness, job loss or some other unforeseen
and unplanned circumstance
- Those who simply do not understand the complexities
of buying on credit
- People who promised to pay through credit agreements,
broke their promises and look for ways to avoid payment
- Credit criminals engaging in fraud.
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*****
Warning Signals *****
The third part in our series
that will help you decide when to place your accounts
for collection:
Credit managers and accounts receivable staff diligently
pursue their overdue accounts ensuring that warning
signals are not overlooked. Not identifying and responding
to these signals could result in wasted effort and increased
uncollectible accounts. By being aware of common warning
signals you will save your company time and money.
Debtor does not respond to messages:
Most business people are busy and difficult to contact
by telephone. However, most professionals do respond
to their messages. Failure to respond to a message should
be a clear signal to credit managers and accounts receivable
staff. When a second message is not returned, your collection
approach should be adjusted accordingly.
Unauthorized return of merchandise:
This is generally an indication of inability to pay
bills as they come due. Debtors cannot unilaterally
change the terms of your contracts.
Dispute regarding merchandise shipped:
If, in response to your requests for payment, your customer
suddenly indicates a dispute regarding the merchandise,
beware. Any attempt to stall should be seen as a warning
signal. Such a dispute was not raised previously. If
your investigation shows the dispute groundless and
the customer will not take steps to make payment to
resolve the matter, the account should be placed with
Credimax.
Non-adherence to terms of sale:
Another common delaying tactic, is your customer indicating
that they do not adhere to your terms of sale. For example,
they may indicate that they pay bills in sixty or ninety
days and not according to the agreed upon terms of sale.
If you did not have an agreement for extended terms
with the customer before shipment, then this is just
another delaying tactic. Explain to your customer your
terms of sale and request immediate payment. If they
refuse or fail to send a cheque as promised, place the
account for collection.
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