This event is common in most companies – the customer does not pay his bill on the date set and agreed in advance with the organization. Even in this case we must check the reasons for the non-payment and conclude accordingly.
In a type D event, there are three common reasons for non-payment on time, each of which entails a different method of collection:
1. The customer did not receive the invoice:
- The invoice is lost (problem with the mail or wrong address);
- the invoice was sent late;
- The invoice was sent to the wrong person at the customer (the invoice was not sent to the accounting department that processes payments);
- The invoice was not sent at all;
2. The customer usually steals credit:
- The customer claims that he did not receive the invoice even though he received it;
- The customer invents claims about the method of billing;
3. The customer is unable to repay the debt (temporary postponement or insolvency of the customer)
We reviewed in depth the reasons for customers not to pay and their remedies in section: Debt collection in arrears, phase 2: treatment of reasons for non-payment
It is clear to us that when the customer does not pay on time because he did not receive the invoice, the organization is responsible for the delay and not the customer. In this case, a normal collection procedure will insult the customer, spoil the relationship with him and will not solve the collection problem until the operational problem of the organization is solved.
Type 2 reason (credit theft) requires us to regulate our relationship with the client to reach regular terms of cooperation with him. Credit theft is unacceptable, and if it is “inevitable” according to market conditions, then it should be priced as an integral component of the deal.
Finally, reason 3 requires the activation of basic collection processes as described in the section Collection of Delinquent Debts – Arrears.
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