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How to Collect Money Owed Without Alienating the Customer

Published June 25, 2020

Question: In these difficult times with people out of work, my accounts receivables are growing. I want to accommodate my customers where possible but where do I draw the line?

Answer: These are difficult times and many people who normally pay their bills in a timely fashion find themselves in a situation not of their own making. You should endeavor to contact your delinquent customers to determine their individual situation and, based on the specifics, offer a workable plan to reduce their debt.

This could include interest only payments for a period of time or a partial forgiveness of the debt if the agreed upon amount is paid in full.  Your goal is twofold; to collect all or part of what is owed and to retain the goodwill of the customer.

Federal and state agencies have responded to the current crisis with various subsidies like tax credits, the Paycheck Protection Program, and unemployment compensation. These benefits are available to small businesses and people who have been laid off or had their hours reduced.

Those eligible for government help will have to take a hard look at their monthly expenses and prioritize those deemed essential. Many mortgage and credit card companies are willing to make concessions, but the customer must request assistance. Refinancing of a mortgage or car loan is also an option.

There is an old saying “You can’t get blood out of a turnip.” There are some people that are in dire straits and only have enough money to cover their basic needs. It is fruitless to hound them for money. In these cases you should offer to defer payments until they return to work. This requires you have an open line of communication with your customer and update their status on a monthly basis.

Again, I stress that you must, on a case by case basis, contact each customer to determine their individual situation. In this manner you can separate the good customer whose problems are temporary from those who are just deadbeats.

The current pandemic is another reason why small businesses, during the good times, should establish a reserve for contingencies fund to tide them over until conditions improve.


Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building. Office hours are 9 a.m. to noon, Monday through Friday.

712 H St NE PMB 98848
Naples, FL 34102
(239) 430-0081

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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