Slow paying customers often need many reminders, coaxing, and urging from multiple collection calls before they will finally pay their balances. Non paying customers require collection calls, and sometimes even legal proceedings to collect on their debt. Sometimes, even after all of your efforts and expense, you can still come up empty handed once you factor in the cost of collection practice. Both slow pay and no pay customers have something in common, they can create destitute problems for a business, especially if the cash flow is already slow. The economy is not booming right now, and the last thing a business needs is a slow or no paying customer to add misery and difficulties to an operating business.

The most common reaction to low pay and no pay customers is anger. That anger drives a business owner to automatically pursue collections with a vengeance. Slow and late paying customers will become instant targets for every conceivable collections tactic possible and 'no pays' will be sought after with the same vengeance from form letters with promises of legal measures if the debt is not paid in full. Although these aggressive measures may bring in some lost revenue, more times then not, you will still wind up empty handed, and if anything, out even more money due to the cost of the collection tactics. Due to the loss of revenue and due to the increased collection measures taken, a business will generally wind up raising the prices on their products or services to make up the difference. The snowball effect of it all is, the good paying customers resent the raised prices and you risk then losing some of those as well. So what is a business owner to do with late and no pay customers?

There are a couple things you can do to help ensure better paying customers. A good start is checking the credit rating of any large commercial prospect before entering into any type of business arrangement with them. For example, if you supply bulk, prior to making any commitment to any ongoing business arrangements where you will be distributing bulk products to a client, first ensure that they have a good standing with other companies they deal with. If they do, more then likely they will follow the same practices with you. If not, you know that you will either need to get the money upfront before delivery, and if not, politely decline their business based on your policy. For individual consumers, especially during these economic times, it is not wise to do business on credit. Demand upfront pay for products if necessary, but make sure to do this across the board - make it your policy. If your business is on a service level, get half of total job cost upfront for all supplies required for the job paid in full first and the other half on completion of the job. That way if the consumer does become a slow or no pay, at least you received the material cost and are not out totally.