Every debt collection agency wishes they could investigate a crystal ball and see the future collections they will make. But when it comes to managing aged receivables sometimes paying attention to changes in behaviour can be enough to give you “the sight”.
This is even more important for business owners managing unmanageable debt.
There are some key behaviours that we suggest business owners pay attention to so that you can manage these tricky debtors before they become problematic.
Key Behaviours of Tricky Debtors
If you have certain clients that have always been “slow payers”, these clients must be strictly monitored as they are surely under financial stress. As a general rule, these types of debtors will, over time, spiral out of control. It’s best to keep in constant contact with your “slow payers”; otherwise it could get to the stage where they are unable to keep up with the level of debt they have accrued with your company.
Short Fall Payments/Odd or Sporadic Payments
This type of payment is a clear alarm bell in the debt collection agency. We can tell straight away that the debtor is trying their best to “keep the wolves at bay” by making small payments across all of their creditors. Immediate recovery action should be taken.
Constantly Changing Excuses
If our debt collectors in Sydney & Melbourne had a dollar for every excuse, we heard, each of us would own an island! Monitoring the excuses your debtors give for the lack of payments they are making can give you a better understanding of whether the excuses are valid or not. If they are constantly changing, then there is a fairly good chance that you are being fed a line.
Lack of Contact
This debtor is clearly experiencing financial hardship and may be in an uncertain position. This behaviour is the biggest red flag of all. If your debtor is not taking your calls, not replying to emails or just downright ignoring you, then immediate action must be taken to recoup your outstanding monies. Make sure you engage the services of a debt collection agency sooner rather than later.
It is so important to pay attention to your debtors and manage the problematic payers before they get out of hand. Making sure you monitor payments and are on top of any changes as they arise, so your bad debtors don’t slip through the system.
If you are noticing any of the above issues when it comes to your debtors, this is the perfect time to engage a debt collection agency to mitigate your loss.