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Slow Paying Customer RANT!!
Had another order off what is becoming a regular customer, who I inherited from my the previous owner.
I granted credit to them, but put a stop to it when they broached £2k in 3 weeks.
My terms are 21days. Which is generous considering I am on 30days with my suppliers – Those that give me credit
Any way got this order for another £300+ of work needed today. No problem, but I want paying for the overdue invoice.
I ordered the materials in but refused to print until I got paid, by cash, debit card, or BACs.
He rings up wanting to by cheque, I refused it. I’ve had 3 bounce in 1 week, so have stopped taking them.
Well blazing row starts then, how he needs the boards, and how he has been a customer for years, and how since dealing with me he doesn’t feel like I trust him.
I simply explained that I wouldn’t do anything until I was paid. He owes me £2k, £600 is overdue, and I would like that £600 before I give him any more credit.
Bloody hell, you’d think I’d asked him to pay me with bloody moon rock! (hot)
I am calming down a little now, but he really did wind me up. Reluctantly he paid by debit card over the phone, and then asked for the job to be reprinted as the machine messed up on the order, but a 24hr turn around didn’t give us much option.
I think he’s got the message that I am here to make money, not be friendly and bend over backwards for his lack of ability to forward think!
Rant over…
I don’t think I was unreasonable and would like your thoughts on what to do next if he starts holding out on the payments… I can feel the commercial debts act ringing around my head.
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4 Replies
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I’ve found the easiest way it make everything an official policy. Give credit customers £x credit, over that they need to pay up. This would avoid it sounding personal in any way. We do the same now with bills 6 months late, they are handed to debt collection agency, we used to feel bad about it as we picked out who to get serious with and who to keep phoning and asking, now they get a letter saying 7 days and it’s handed on. Out of my hands, nothing I can do type thing!
G
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I send a polite letter at 21 days, when it is initially overdue, with a copy of the statement, and duplicate invoice, requesting payment within 7 days.
If after 7 days I am still owed, I send a 2nd letter which highlights my terms and conditions, how I can charge interest (in fact any business can to any other on over due invoices), and that items are still mine and I can re-claim them.
I then give 3 days to pay in full, by either BACS, Cash or Debit card (no cheques),
If after 3 days I send a third letter highlighting what charges I can legally apply. (compo up to £40.00 for under £1k, £1k-10k £70.00, and the interest on the account 8% above the bank of england base rate) That usually works and haven’t yet charged interest…
How does the debt recovery service work? Do you get your cash when the pay up, or once it’s handed over? What kind of fee’s do you pay?
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Hi David, if you go through those processes your customer had plenty warning and should have not even asked for you to do any work, can’t really see why he had a problem.
Not sure about the charges, it’s a flat rate for under £500 and a % for over, we hardly ever get to that stage though.
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I have cut back on the credit to customers. I usually take a big deposit, and then payment on completion.
This customer re-sells a lot of the signs I make, and I gave credit. It’s kind of annoying when they just expect more when they’ve not paid one that’s overdue.
I will certainly look into debt recovery agencies, and put together a system to procedure like yours which all customers are treated by.
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