A one-size-fits-all approach to collections is straightforward and easy to execute, but there is a better way. For example, would your approach to collecting delinquent payments from a customer vary if:
You knew the contractor was going out of business?
Your contractor’s business is about to double and you stand to benefit?
You’re actually losing money on this customer?
Your customer has been a loyal, profitable customer for the last 10 years?
Of course it would. This article provides guidance on how to assess the true risk of not getting paid and understand the relative profitability (or lack thereof) of each customer. Putting those two pieces together gives you a simple, powerful framework for how you should approach collecting.
About the Author
Scott is president and CEO of BlueTarp. He has spent the majority of his twenty year career in financial services helping businesses grow more rapidly through the effective use of credit.More Content by Scott Simpson