Dealing With Chronic Slow Pays 


Chronic slow payers can be profitable, long-term customers, but they require constant attention so that they do not age-out to the point they become bad debts. 

If through inaction, you allow customers to pay slowly, not only do you not get your cash flow, but they will order from your competitors rather than risk your asking them to pay up.

If you ignore them too long, they will become your “uncollectible” ex-customers.  

Debtor psychology is that if the debt is 360 days old, they figure they’ll never have to pay it, certainly not the full amount.

Train Your Customers To Meet Your Expectations

You can train chronic slow payers by starting consistent collection efforts at the due date.  

Many collection departments allow debtors to “coast” because of lack of staff or collection initiative, and many of these end up so old they have to be placed with a collection agency.  

Customers will pay you just the way you train them to, if they know your expectations, and know that you will follow through.

Collectibility Decreases With Age

This chart is an excellent reminder to address slow pays more quickly. Not every debt is collectible, but, on average, debts are 200% more likely to be collected if assigned for collection at 90 days vs. 360 days.













The Big, Obvious Secret to Reducing Bad Debts

Do not let accounts get so old before assigning them to a collection agency. Often, accounts sit in limbo for months to avoid recognizing a bad debt or due to decision gridlock.

If you act more promptly, you will collect your money more often than not. If you delay, you will more than likely end up with a writeoff. 

The following two scenarios are constant frustrations to collection agencies, and for good reasons.

Creditors frequently hold accounts until they are so old that they are uncollectible. 

Creditors delay placing with an agency because they are concerned about the collection fee instead of focusing on the money that could be collected.

Avoid Collection Gridlock with a Collection Policy

The best way to avoid debt-placement gridlock and the resulting losses is to establish a written company collection policy, and stick to it. Here’s a simple example:

Collection steps for accounts in the small account risk category will commence as follows:

  1. 10 Days Late:  A collection email #1 is sent when the customer is ten days past due.
  2. 20 Days Late: If the customer has not responded or made a promise to pay and followed through on it, a second call will be made, supported by email #2.
  3. 30 Days Late: This communication will advise the customer we need payment in 15 days or we will have to hold orders. This is reinforced with email #3.
  4. 60 Days Late: The account is escalated to the manager, who will make a “final demand” before placement with a collection agency. This is reinforced with email #4.
  5. 75 Days Late:  If no satisfactory resolution, Certified Letter #1 will be mailed, 
  6. 90 Days Late: The account is placed with the collection agency.

Fast Quiz: Is Scenario 1 or 2 more likely to avoid bad debt?

  1. “This account is uncollectible. Let’s turn it over to a collection agency”.
  2. “This account is aging and not paying. Let’s turn it over to a collection agency before it becomes uncollectible.”


Note: Smyyth’s affiliate, Leib Solutions LLC is a high-rated commercial collection agency.