Ask The Right Questions of a Customer Proposed Payout Plan
If your customer comes to you looking for a payout plan, you need to be careful before you sign off on any plan they have proposed themselves. Be sure to fully read and understand their plan and the ways that they plan to repay you in the future. Before you agree to any sort of customer proposed payout plan, consider the following questions.
- Why the plan is needed. Though you may well have discussed this in person with your customer, make sure that you also get all the facts down in writing before you agree to a payout plan. Have them put down explicitly why their payments are not forthcoming. At the very least, take careful notes when they discuss this verbally with you, and then email them to confirm that you are in agreement about what was discussed.
- Financial documentation. Other than just taking your customer’s word for it, be sure to get verified financial information about their payment situation. Getting an interim or year-end fiscal statement will allow you to verify their inability to pay, and there is little the customer can do to argue against the logical necessity of proving their need.
- Are you the only one? If your customer is running into these kinds of payment troubles with your company, there is a high likelihood that they may be doing so with other vendors or creditors as well! Look into the names of other creditors who are getting a similar proposal, and if there is another creditor getting a better plan, you should be able to request the same plan as well. As always, get all of this in clear documentation. Of the creditors who your customer has proposed a payment plan to, get a list of those who have actually accepted it as well. All of this information will help you get a better gauge of what you can expect for your own payment prospects.
- Ensuring you’ll get paid. Take the proper precautions to protect yourself against the loss of money by making your customer find some way to ensure you will be paid. If they are not willing to sign a promissory note, what will they be able to do to convince you of their ability to pay in the future? Investigate whether their bank has declined their request for a greater line of credit, and why. Get as much information as possible again, in writing, so you won’t be left out to dry.
If you are having troubles with delinquent customers and need debt collection assistance, call us at CMCS to make your job easier. We are here to help—give us a call today at 800-223-6259.
