How to Collect on Non-Paying Accounts

Lydia asks:

“What’s the best way to collect on an account that isn’t paying?

I made the mistake of trusting a new client, and now it’s costing me money. It’s just a $50 basket, but it’s my money. How do I make her pay?”

I bet that more gift basket designers than you realize have experienced this problem, including me. I once extended a first-time customer credit on a $30 basket for one reason: her telephone tone was forceful, and I allowed her to control the conversation.

After a month of calls, I finally received the $30 payment, and at the same time I didn’t blame her. I blamed myself for not creating a set of rules and following them.

I recommend that you call the client asking when payment will be mailed. She may have innocently overlooked the bill, and since you did not ask for money up front, this is the best way to start.

Next, immediately follow up your telephone call with a bill sent by mail that’s accompanied by the collection letter in Top 10 Letters.

One call is sufficient. If you resort to sending more notices by mail, the final notice is to be included with a letter that implies legal ramifications.

Send the final notice by certified mail. Her signature will prove that the letter was received, which is a necessary court document.

Hopefully, the collection of $50 will not be settled in court, but sometimes this is the only way to receive payment. You might also consider writing the amount off as a bad debt.

Hard lessons are learned in all businesses, but don’t beat yourself up over this. Proceed accordingly, and be grateful that it’s $50, not $500.

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