You should always be aware when one of your customers starts to show signs of trouble. You don’t want to crack down on someone that’s just a bit forgetful, but you also don’t want to end up stuck with hundreds or thousands of dollars of bills that your customer can’t pay.
Here are some signs that your customer is heading toward becoming a problem rather than a slow payer:
- They’ve begun paying erratically, settling up on smaller invoices while larger ones don’t get paid.
- You get the feeling that they’re avoiding your phone calls, or maybe they’re a bit touchy or annoyed at your inquiries.
- You request information, like updated financial statements or maybe for payment schedules, but are ignored.
- The customer asks you to extend him more credit, or maybe he starts placing bigger and bigger orders.
- They ask you to provide a good credit report to a third party, even if you don’t think their behavior warrants it.
Accountants have other ways to detect problem customers, so think about contacting us if you need further help.
When your customer does reach that point though, you may have to consider forwarding the account to a collection agency or telling them that all future sales will be cash on delivery. Don’t let someone else’s bad business pull you down.