Cut off your Customer?

[Joe Micheal]

If customers overdue, when do you decide to cut them off? And what do you do if it is a customer you think you cannot afford to lose? How do you tackle the situation?

[Bob Barr]

Originally Posted by Joe Micheal

If customers overdue, when do you decide to cut them off? And what do you do if it is a customer you think you cannot afford to lose? How do you tackle the situation?

One thing to consider is proposing an installment plan for the customer to get caught up on the overdue payment over a reasonable (but fairly short) period of time. (I view cutting a customer off as the last step after all other possibilities have failed.)

[HTMLBasicTutor]

You need to keep on top of your accounts receivable to avoid loosing lots of money if the client walks away.

In my contract it states the terms and conditions of sale and what happens when the client falls behind on payments.

-not paid within 10 business days will result in halting work.
-fails to receive payment and intends to stop work it will first attempt to contact the Client by telephone and advise the Client of such intention.
-The Client will have one business day to cure any such payment problem prior to ceasing to perform Services.

(BTW: never had to enforce the above yet)

They have to pay other service providers on time (e.g. hosting, domain registration, general suppliers, etc) to keep their account in good standing and not loose the account. You should be no different.

As far as loosing the client goes, they obviously don't respect you (or any other people they are behind on) or they would have contacted you to explain why they have fallen behind. Avoiding the issue just makes for bad feelings on both sides.

Don't release anything to them until the account is current.

[saicou]

It's also important to remember that satisfied customers in any
business are by far and away your best advertising for new
customers. Therefor it is essential that you keep in contact and
nurture the relationships you have with your current customers and
fans in order to attract new customers.

The more your current clients know about you and connect you to
your work the easier it is for them to share their excitement with
anyone who expresses an interest in your art when visiting their
home or office and seeing your work.

[carol.prime]

I think 10 days is enough. 7 days of the is several follow up and if you haven't received any response then in the 10 day, services should be canceled.

[vanessamae]

If you think that this customer is valuable to your business, you can talk to that customer possible ways to cut off customer's overdue account. But if this overdue is not settle over weeks or months, depending on the situation, then that customer is not worth for your business.

[TrumpiaTim]

Tricky situation, I would attempt to workout some sort of payment plan with the client. However you have to have some sort of cutoff point if the client refuses to pay.

[Snooks]

Well whats most important to me is finding out WHY the non-payment??

Now if he's short on money, having cashflow issues and finding it hard to pay then i will work with him to help resolve the issue. I may even do some services for free if i can see benefit by having him as a long term customer.

Quite frankly, i would be way more concerned if he is REFUSING to pay because of a dispute, his belief the work was substandard or that our company failed to fulfill our agreement, or provided work that was innapropriate in some way.

If thats the reason for non payment then i would be truly alarmed and resolve the issue at all costs.

[serveruptime]

Well, cutting off a customer doesn't sound like a solid way of thinking to me. How can you cut someone who's depending on your professionalism - there are rules. Rules that define a pro by his undying dedication - not by smarts or geography.