Customers: The Good, The Bad and The Ugly

Sales can help you forecast how much your Business is going to make over the next few months …

But the reality is …

If invoices aren’t paid, the deal isn’t sealed.

At the end of the day – Cash is King….

As business owners, we usually have several different kinds of Customers;

The Good Ones, the Bad Ones and the Ugly Ones.

This blog looks at what the SME Owner could do to categorise their customers and build in basic Risk Criteria

… enabling them to establish better ways of getting their debts paid.

The following looks at each category and what it might mean for those Outstanding Invoices:

>30 Days

Generally, if your standard terms are 14 or 30 Days, then these are Invoices which are 30 days past Invoice Due Date.

So, what would you do to get that debt or unpaid Invoice in quicker?

At this stage, chasing these Invoices is known as soft chasing.

Soft chasing may include:

  • A Courtesy Email to the Client/Customer to clarify that they have received the Invoice in Question, and that their Standard Terms have expired and that payment is now due.
  • A Follow Up Call
  • Maybe a Follow Up Email to say that you are looking for a Payment Date.

>60 Days

So, you’ve tried all of the above but your efforts haven’t resulted in a positive response.

Here’s your next steps:

  • Try all of the above again, but ramp up the pressure x2 or x3 depending on your industry and the problem Customer
  • Think about adding in Late Payment Interest and Charges
  • Have more meaningful Communications with those who can provide a bit of assistance in getting these Issues solved.

>90 Days

When an Invoice gets to 90 Days+, they tend to become harder to collect, as they usually carry a dispute or a Customer Product/Service Issue that needs solving.

It’s these Items that need substantive analysis to understand where you are and where you want to go with it.

  • Better, closer contact negotiation may be needed.
  • Understand the Problem and/or issue that may arise – offer another way of Dispute Resolution.
  • Think about issuing Final Demands/Letters Before Action.
  • Seek the help and advise of third party Debt Collection Agents or Debt Strategists who can you help pan out a framework and identify key issues that you may face in your industry/sector.


The above is just a basic guide.

If you need any more information, please do not hesitate to get in touch to discuss any and all of your options for chasing the bad and the ugly customers in your business.

Tel: (+44) 0208 088 4565

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