TIP OF THE WEEK

Is “BOB” a Customer or a Debtor?

How familiar is this scenario?  You are reviewing your account receivables and “Bob” is back in your 90+ day column, a familiar sight.  He has been here before but this time it is different, he is not returning calls, your gut tells you your invoice is no longer a priority to Bob and you feel yourself beginning to get frustrated.

Now what…?

Since you are the one responsible for your company’s AR and what to do with delinquencies, a portion of your job is to separate clients from debtors.  A simple rule of thumb is customers pay and debtors do not – SIMPLE.  Now as your partner in your mediation and collection efforts, JSD’s job is to help you define the lines of separation.

While a “customer” will take your calls, return your calls and keep the lines of communication open while working with you towards resolution, it should be noted a “debtor” will not.

A “customer” who is not returning your calls at 90+ days, who appears to be avoiding your direct contact of emails and voicemails, who is selectively in business at their convenience, who was a loyal customer, etc. is quickly becoming a “debtor”, no matter the length of the relationship.  The warning signs are turning into red flags and if you wait too long, it will be TOO LATE.

Be wary of your emotions getting in the way of the facts/signs for we all want to believe the good in customers, yet, if Bob is suddenly in trouble, there is a high level of probability Bob is embarrassed and ashamed, therefore Bob is not going to tell you he is in trouble. He will just “ghost” ya.

JSD is here to help you with this exact issue.  As your B2B mediation partner, JSD has built our infrastructure around four cornerstones; tools, talent, technology and sacrifice in order to protect and defend YOUR assets. When you see your customer trending from a customer towards a debtor, call your JSD representative and ask them what can JSD do to help you decide on what is the next right action step to take.  An early step is to get our Vital Warning Signs checklist – it will organize your internal collection efforts.  Many times JSD can help without placing the account for collections, yet in order to do this, you will need to communicate with us openly.

Stay tuned for our next Tip of the Week and good luck with this difficult yet common task.

Alan Nadler

Executive Director of Business Development and Client Acquisition