20 Red Flags for Collection Problems
- The business had layoffs recently.
- You noticed that the contact address has changed, especially if the business has moved numerous times in the past few calendar years.
- One or multiple long-time employees are now gone.
- The company cannot pay until their customers pay.
- The company sends partial payments irregularly instead of the full amount stated on the invoice.
- A competitor contacted you for a credit reference on a customer.
- The company is being sold.
- The owner is always out of the office or unavailable to take calls (in a meeting, out of town, on vacation, etc.).
- Your customer is waiting for a new bank loan or additional funding.
- The business has broken promises to pay and payment deadlines in the past.
- A family member of the owner is experiencing a serious illness.
- The business’ biggest customer recently declared bankruptcy or started shutting down operations.
- The company does not answer your calls or return them when you leave a voicemail.
- The owner is going through a tough personal time (marital issues, owns another business that is closing, etc.).
- You have noticed changes in the quantity of an item ordered (decreases or increases).
- The person in charge of signing checks is always unavailable to speak on the phone.
- The customer has stopped responding to your emails.
- It takes over a month to get invoices approved for payment.
- The customer consistently has problems finding the invoices that you sent (electronically or physically).
- The business disputes an invoice for strange or illogical reasons.
Why Are These Red Flags?All of these red flags for collection problems are signs of instability at a business, whether it is financial instability or ownership instability. When employees are suddenly leaving or being laid off, financial issues are usually at the heart of the problem. Another serious sign of trouble is learning that a customer is waiting on funding or waiting to hear back on a bank loan. If a business is trying to obtain more capital and unable to pay the bills in the meantime, the funding might not arrive, and the business could shut down. While invoices do get lost and people who sign checks do leave the office, you shouldn’t ignore the trend if a specific client always seems to have an excuse for why an invoice hasn’t been paid. The chances of multiple copies of an invoice being lost and, when they are discovered, the stakeholders involved in payment all being inaccessible are incredibly low.
Partner with Alacrity Collections, a Professional Collections AgencyAlacrity Collections is proud to be a leader in debt collections. We help organizations across a wide variety of industries with their collection problems. Alacrity’s team achieves great results that are over twice the national average and treat all of our customers with dignity and respect. We work tirelessly to protect your brand and improve your net returns. To learn more about our services and get in touch, please call us at 1-800-752-9663 or set up a phone appointment directly on our representative’s calendar via this link: www.calendly.com/hheemann.
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- When Is It Time to Fire a Client Over Unpaid Invoices?
- Collecting from Consumers Versus Businesses
- 3 Signs You are Working With a Professional Debt Collection Agency