What if customers refuse to pay finance charges?

Kimiko G. Judith

Thea Dudley

Pricey Thea,

I have been wrestling all around for rather a couple of decades on how to cope with specific customers who refuse to fork out or overlook finance charges that accrue on their account. I have no genuine technique set in area, so I manage it on a scenario-by-situation basis. I do not automatically want to be the solid arm of the regulation and alienate my clients but I also do not want them to consider advantage of me. Do you have recommended treatments on how to manage these situations? I take pleasure in your tips and any recommendations you may possibly have that will assistance me be much more consistent with this concern.

— Finance Pleasurable in San Francisco


Dear Finance Entertaining,

“Where I occur from, we never shoot horses when they get ornery we tame ‘em.” That estimate is from John Wayne’s character in the 1932 motion picture “Ride Him, Cowboy”. The plot of the movie is John’s character is going to conserve a horse that is on demo for murder by taming it. Now, I do enjoy me some John Wayne westerns, but seriously, a horse on trial for murder? All people knows it is constantly the rider’s fault.

The concept, nevertheless, is effective for us in this circumstance. “We really don’t send out buyers letters they will ignore when they grow to be ornery we teach them.” A little patience goes a prolonged way. I have always considered finance expenses as a device that can be leveraged for a opportunity to have a discussion with my purchaser.

I appreciate the line, “We really do not shell out provider charges.” Very well, you really do not spend your account on time both, which is how you obtained the finance demand, so what just do you do? By the way, most individuals do not come across my piquant wit amusing when it is utilized on them.

If it is the very same long-term shoppers on your record (and from your electronic mail I am assuming it is) then just take a world wide look at the account. Tap into your revenue reps’ information of the account. How does this purchaser do enterprise? What small business segments do they function with? Are they deal dependent, government, homeowner? What types of assignments make up their operate?

The data you uncover may possibly notify you the account was set up to fall short from the starting. They could have assignments that pay out in 45-60 days and will In no way be ready to make a 30-working day expression.

As soon as you have a minor perception, connect with the accounts payable person or the operator. Inquire them flat out what is maintaining them from paying on time. Do they want task accounts set up? Are they all AIA billing so this is jamming them up? There is no substitute for a immediate discussion with your buyer to locate a way to set the account up for achievements transferring forward.

If they are non-responsive or if they answer but a lot more like the traditional “We never pay out service prices,” then you have a several choices:

  1. How useful is this shopper? It may possibly be a business enterprise selection to just eliminate the expenses. All people acknowledges they are in no way likely to fork out them, so just switch them off, settle for it, and opt out of the madness.
  2. Put the account on Tricky Maintain until eventually they shell out the finance costs (appears extraordinary but actually is dependent on the situations. If you have to, you have to).
  3. Present a remedy of splitting the fees with them but shifting forward, they want to get that monthly bill paid on time. You can do a “one time” take in the charges, but moving forward let us get our poop in a team and get this paid on time.

I am not a big enthusiast of the snail mail, but I do stick to up the dialogue with an electronic mail recap. That way we the two have a historic history of what went down, and no a single had to journey herd about any individual to get it accomplished.


With more than 30 several years of credit score administration working experience in the LBM business, Thea Dudley consults with organizations on a wide array of credit score and financial administration troubles. Contact Thea at theadudley@constitution.net

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