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Recognizing Red Flags for Overdue Accounts and the Best ways to Prevent them
Thread poster: Jianjun Zhang

Jianjun Zhang  Identity Verified
United Kingdom
Local time: 16:44
English to Chinese
+ ...
Sep 14, 2005

While searching for alternative approaches to get paid by my client, I found this following article. I think this is rather useful for us.

Unfortunately, during the last 15 days after the payment due date, I almost encountered all of the following warning signs from my debtor. He's now nowhere to be available on his companies' (this guy registered two companies in Australia) phones and even his home phone.

I'd like to add the following:

1. Before accepting projects from a new (esp. overseas) direct client that contacted you through telephone, fax or E-mail. Always double-check the company's location, size, nature of business.

2. When deciding to take the job, explain politely to this new client and try to get at least 10% down payment to start the work. And when the job is finished half way, ask for another 40% payment and go on, etc.

Most businesses follow the 90-day rule when it comes delinquent customers: After an account is 90 days past due, they call in a collection agency.

Turning an account over to a collection agency shouldn't always be a last resort. In fact, some accounts require immediate attention. When you see the following warning signs, consider calling a collection agency right away.

A customer continually ignores your collection letters and phone calls.

A customer tells you they are unable to pay an invoice and will not work with you to develop a payment schedule.

You can no longer contact a customer ¡ª they've moved and left no forwarding address, they've gone out of business, or their phones are disconnected.

A customer has promised to pay on several occasions but has not sent a check.

A customer continues to delay payment by using diversionary tactics. They may claim they never received your invoice or shipment, tell you they don't agree with your payment terms and conditions, or use other excuses to avoid paying altogether.

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Recognizing Red Flags for Overdue Accounts and the Best ways to Prevent them

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