What to do when you suspect a customer who owes you money is considering
One crucial question for every business owner to ask herself is: "What do I do when I suspect a customer who owes me money is considering bankruptcy?" This question is crucial because, obviously, your customer's money is the lifeblood of your business. If a customer declares bankruptcy, you stand to lose hundreds or even thousands of dollars. You could be owed money by a single individual, you could be owed money by a corporation. There are ways to approach both of these situations when it comes to your customer who's considering bankruptcy. Your customer who's considering bankruptcy is basically considering doing you significant harm. You've got to be ready for this, you've to have a plan. As they say, the best defense is a good offense. That is, you want to aggressively make sure that you won't lose out in a case of bankruptcy long before the bankruptcy ever occurs.
You never know, after all, who's going to declare bankruptcy. It's a thing that comes out of the blue. Therefore, whether you're working with corporations or single individuals, you must take steps ahead of time to ensure that you get all the money that's coming to you. Now, there are signs of bankruptcy-leaning customers. Remember, the question we started out with was "What do I do when I suspect a costumer who owes me money is considering bankruptcy?" Therefore, you want to be aware of the signs that you've got a customer on your hands who might be capable or even preparing for such an action.
|
|
One such sign, for example, is a customer who's run up a large tab and one day he calls asking for more of your services. Let's set the scene here. Let's say you're in the paper business. One particular customer owes you hundreds of dollars for the vast reams of paper he's consumed. He calls you on a particular morning to ask for even more.
"Look, Stan," you say. "You already owe me hundreds of dollars. You haven't given me any sign that you'll pay it back. I don't want to be rude, and I certainly think you're a great guy, but I'm getting a little worried about the payment coming to me. I'm wondering if I'll ever see it."
"I can't believe you!" screams Stan. "I've been a devoted customer for years, and look at the treatment I get! Why, this is a slur, a slam, a direct questioning of my integrity! How dare you, sir!" etc.
In other words, Stan immediately goes on the offensive when he should at least admit that you've got a reason for concern. Time and experience has shown that customers who are late on paying their bills and who grow angry when you press them are more likely to declare bankruptcy than customers who pay on time.
Let's keep going. "What do I do when I suspect a customer who owes me money is considering bankruptcy?" Again, you've got to start your movements long before this happens. It's a chess match, you've got to be the aggressor. Be firm about a customer paying his bills UP FRONT. That is, don't give your customers a chance to get used to not paying their bills. The first time it happens, pounce on it like a cat pounces on a mouse. After all, you're not in business to make friends. The thing that's important at the end of the day is that your business is up and running. You owe it to yourself and to your employees. So, establish a no-nonsense policy about customers paying their bills. They've got to do it immediately. If they do it immediately you're not going to be hurt if they declare bankruptcy later.
Be sure to check your customers' credit reports. Do they have a history of not paying their bills? Do they care whether or not they owe someone money? This is a highly accurate way of figuring out who might declare bankruptcy and who probably won't.
When dealing with corporations, one move you can make is to ask the OWNERS of the corporation for a personal guarantee. They can hardly refuse you that, right? That way, if they declare bankruptcy for their business, you can still take them to court and try to get what's owed you.
Finally, if you're selling very expensive products, you might want to consider a Uniform Commercial Code filing. A Uniform Commercial Code filing means that you've got the rights to the product you've sold until you receive payment in full.
