8 Do’s and Don’ts When Confronting a Customer about Delinquent Accounts

If you’re a small business owner who operates on credit, than you know all too well what it feels like when a payment date passes and you still haven’t received your check. To get paid, you have to confront the customer.

Confronting a Customer about Delinquent Accounts

However, this communication is crucial, so make sure when an account is first past due, you follow these 8 do’s and don’ts to reach out to the customer successfully.

“¢   Do send a letter first – When the payment date first passes, immediately respond with a reminder letter.

“¢   Don’t send a generic letter – Don’t send the same letter to all customers. Craft a unique letter given your relationship with that customer and how often or not often they pay.

You do not want to send a severe collection letter to a first-time offender and you certainly don’t want to be too friendly with those chronic late payers. Check out these sample collection letters to help you decide.

“¢   Do follow up the letter with an email – Multiple channels are always best. Send an email a few days after the letter has mailed, telling customers to keep an eye out for it.

“¢   Don’t be abrasive – In the email, be friendly. Since that communication is more direct, it’s better not to come on too strong until it’s necessary.

“¢   Do follow up with a call if payment isn’t received in a week – If another week has passed and you still haven’t received payment, get on the phone and call the customer. This is the most effective collection technique.

“¢   Don’t get emotional – When you are on the phone with the customer, remain professional. Don’t let how upset you are cloud your decision making. Stay focused on the goal of the call.

“¢   Do give them one last chance – After you have reached out to these customers multiple times, wait at least once more week for them to react to your communication. Always give them one more chance to pay before immediately sending the account elsewhere.

“¢   Don’t promise something you won’t do – In your attempts to get paid, if you have told customers if they don’t you will:

  1. Report the late payment to the credit bureaus
  2. Call a lawyer
  3. Send the account to collections

Then you MUST do so. Customers won’t take you seriously if you don’t act upon the threats you have made.

Meredith WoodAbout The Guest Author:   Meredith Wood is the Community Manager at Funding Gates, the first ever online credit department for small businesses. By automating the entire debt collection process, Funding Gates serves as the one-stop-shop for receivables management.

Past Due Rubber Stamp Photo via Shutterstock

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2 Comments 8 Do’s and Don’ts When Confronting a Customer about Delinquent Accounts

  1. John Battista

    One thing I would add is to not have sales reps be responsible for making the calls to their delinquent customers. Leave the job to your bookkeeper (or even a different sales person) to maintain a stronger (and less easily persuaded) front.

    Reply
  2. Meredith

    I like that addition a lot John. Your whole team should be caught up on your receivables process, but it needs to be properly delegated who is responsible for what. Sales reps need to have a good relationship with the bookkeeper so they can communicate frustrations. Also, I think keeping them separate helps the Sales rep keep their relationship with the client, since this is such a touchy subject. Great advice!

    Reply

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