Collecting past due account

by J. W. Eller assistant vice president American Credit lndemnity Co.

The dishonest debtor never has any intention of paying. Often known as a "dead-beat," he, right from the start, works to cheat creditors.

THE EMBARRASSMENT

One fact is very important when you are trying to collect past due accounts without losing customers. That is. this: Most delinquent debtors are embarrassed because they are not able to pay their bills.

Sfory qf o Glqnce

Valuable tips on how to collect those sticky debts without losing the account in the Drocess .. a number of methods are presented the psychological problems involved are also examined.

Usually, the business owner is proud of his good paying habits and credit record. Then he suddenly finds himself, possibly through no fault of his own, unable to pay according to schedule, and he is embarrassed.

Hurt pride causes the embarrassed debtor to do strange things-things which he normally would not think of doing. Sometimes. he refuses to furnish information or promises to supply it later and never does. Sometimes, he makes promises which he knows he cannot keep. He does it to gain time with the hope that things will work out. Then again, when pressed for payment, he adopts a belligerent attitude which is completely unlike him. Or he may hide behind a wall of silence, refusing to ofier any explanation to his cred' itors.

THREE TMPORTANT QUEST}ONs

In making the right approach toward an embarrassed debtor, three questions are helpful. They are: Why? How? and When?

In most cases. debtors do not need to be reminded that their accounts are past due. You have sent them statements and past due notices.

Keep in mind that the right approach does not mean leniency. Rather it indi' cates strength-the kind of strength which enables an owner-manager to work with other business owners with consideration and justice.

Of course, the natural question to ask him is 'oWhen do I get paid?" But before you ask it, try putting yourself in his place. How would you react to such a (uestion if you were embarrassed because you were not able to PaY? Chances are you would resent it.

Such resentment occurs because 'o$/hen do I get paid?" is a selfish question' It shows that you, as creditor, are not inter' ested in your customer's problem or wel' fare. Sometimes, such a question causes the debtor to withdraw further into his shell of silence. Or he might make addi' tional rash promises or become antago' nistic. In each of t}ese cases, you are well on the way to losing a customer' oowhy hauen't I receioed, payment?" is a better approach. V/hen you ask 'owhy,'? you give an embarrassed debtor the opening he has been waiting for. "Why" gives him the opportunity to tell you about his setbacks and the reasons why he had been unable to pay you. Thus the belligerent debtor has a chance to air his grievances -real or imaginary.

Of course, you have to watch for ex' cuses. Howeve, as a rule, an honest and embarrassed debtor will not make up an excuse. Rather, he is glad for the chance to explain why he had not paid. Often, a reason can be checked out. For example, suppose his reason is that one of his big customers has not paid him. If need be, you can easily check such an excus€,