When customers won’t pay: 4 Radical Ideas for Collecting Receivables

You may have figured out by now that Cash Flow is on my mind.  We have customers who are not paying.  Big companies, with big bills.  So I’m sitting around figuring out how to squeeze money from these people.

To make it worse, the delinquent accounts are on the other side of the world.  They probably figure that if they ignore me long enough, I’ll go away eventually.  That’s not going to happen.  The world is too small, and I’m willing to go as far as it takes to collect the money we have earned.

I’m pretty charged up over this, so, I’ve come up with 4 radical ideas for collecting past-due accounts from deadbeat companies.

1. My brother likes to tell the story of flying to India to make an “in person” collections call — like a repo man in a suit.  He sat in the guy’s lobby for the better part of the day until the guy could no longer ignore him.  The guy relented.  My brother came home with a suitcase full of cash.
2. I’m more of the mind that bad press makes for good payers.  I’m leaning toward shocking blog posts, rants on LinkedIn and even Press Releases that hint of the “contract cancelled due to economic problems being experienced by Company X”.  In a small on-line world, this kind of news can travel fast.
3. Traditional letters from lawyers are good too, of course, but probably less effective today than they once were.  Unless the letters go to the debtor’s customers.  “Dear Sir.  Your important vendor, Company X, has failed to pay their bill and we are seeking to collect directly from YOU.”   I’m not sure its legal, but I think it would get some attention.
4. In some of these countries, I’m told that the best collections are done by bribing the local police chief.  It’s not exactly official police business, but the chief has a way of letting people know that they should pay their bills.  He’s very good at his job, and often collects the money on the spot.

Now… If only I could trust the police chief with a suitcase full of cash!

OK, I can’t recommend any of these 4 methods to you.  But its fun to think about them.  Tune in tomorrow to find out what I really did to solve this problem… or let me know if you’ve got your own “creative collections” ideas.  I’d love to hear them.

Till then,

David