knowledge zone
How can you tell if a debtor won’t pay?
Any business owner can run into payment difficulties. Sometimes a client delays payment, leaving us unsure whether we’ll receive the money we’re owed on time. Of course, we could try to get hold of a crystal ball that will tell us whether someone will pay, or take a chance and try to predict the payment date from coffee grounds. However, as we know, these methods can be unreliable. So what can we do? Learn to read the signs that indicate there may be a problem with payment for our services.
Impulsive actions in debt collection are certainly not beneficial. In debt collection, it is important to proceed calmly and wisely. Although we have an emotional attachment to our hard-earned money, we must act sensibly and be guided by the facts. A delay on the part of the debtor does not always necessarily indicate bad faith. But every such situation requires a response, as the fate of our company depends on it. And here the question arises: must we wait idly? Of course not. Correctly interpreting the signals that the counterparty gives us through their behaviour can result in us preventing problems in good time.
Red flags that cannot be ignored.
You should assume that a business partner who wants to cheat you will try to drag their feet. They will also try to maintain the appearance of being an honest businessman. However, there are certain signs that something is amiss:
1. He avoids conversations, as if he had something to hide – why does the debtor never seem to have time? Is he fobbing us off? It’s possible he’s talking to other creditors and wants to wriggle out of paying us. He may also be playing for time in this way to delay repayment of the debt. Or they reply, but in the evening or at night, ensuring that we won’t respond (at least until the morning).
2. Makes empty promises. They use phrases such as “I’ll try to pay”, but do not specify a specific date. It is possible that they assume in advance that the payment may not go through, or that they are certain they will not settle our invoice. In this way, they avoid taking responsibility and making commitments to the contractor.
3. No one is responsible for the payment. Once we manage to speak to someone from the contractor’s company, that person passes the matter on to another, who then passes it on to the next. As a result, we are told that it is actually unclear who is responsible for the payment and we are unsure who to speak to regarding the outstanding payment.
4. Citing technical issues. Of course, unforeseen circumstances do happen. That’s perfectly natural. However, frequent claims that “the bank has put something on hold”, “the funds are stuck in the bank” or “the transfer didn’t go through” are usually just excuses. Let’s remember that in debt collection, there is no such thing as bad luck; there is simply a lack of money or a desire to avoid payment.
To sum up: if something looks suspicious, it’s best to be on your guard and not let yourself be taken in!
When should you stop waiting and start taking action?
The most important moment is when you have to stop giving them another chance. If week after week goes by and all you get are empty promises, it’s a sign that they’re just playing for time.
| Our advice: be consistent and listen carefully. If someone promises further payments but hasn’t made the previous one yet, remind them of the arrangements and stay on top of the situation. Don’t let yourself be drawn into excuses – it’s important to take action and not wait indefinitely. |
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