How can I recover debts without alienating valued customers?
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One of the main reasons why some people choose not to pursue an overdue invoice or other client debt is because the customer has been prompt to pay in the past and/or is ‘valued’ in some other way, such as a friend of the family or a customer who was important to the growth of your business in the early days.

Whatever the reasons, you might feel like you ‘owe’ them something, even if technically your relationship has always been a professional one and you have supplied everything they have paid for.

The problem is, when that customer starts to run up a debt – particularly if they miss an invoice deadline – you don’t want to leave them thinking it doesn’t matter if they pay you or not.

So, how do you recover the debt without alienating the customer? It’s one of the great challenges of business, and particularly of small businesses where your relationship is likely to be more personal.

First up, give them a chance to explain; contact the customer directly, and make sure your invoice hasn’t genuinely been misplaced or just missed completely. A good, reliable customer will often realise their mistake and pay in full immediately, and this can mean no further action is needed.

Be courteous and friendly, as suits your existing relationship with the client – you can always get stricter with them if they fail to pay within an agreed extension period.

And if it comes to offering them a deadline extension, make clear that it is an extension to the original deadline – their invoice is still overdue – and that the extended deadline is final, no further time will be permitted.

You can do this politely, but it is important to make clear that, although you are willing to be flexible for a valued customer, they cannot simply fail to pay you indefinitely.

Finally, take a personal approach; get on the phone, talk to them, and find out what’s happening to delay their payment.

If you know and trust them, you probably trust them to want to pay you if they can, so it might be a case of giving them an extra week, or letting them pay in instalments.

And if a change in circumstances has meant future invoices will be in doubt too, you could simply arrange to bill them more often, or even take payment on delivery as you go along, so neither party is exposed to a sizeable credit risk in the future.

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