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In the Drivers Seat

In the Drivers Seat

When it’s all said and done, Collectors either want a commitment for payment, or to gather new information to understand why their customer cannot issue payment.  Once a sale is made on open account terms, the debtor is in a very real sense in the driver’s seat.  Why?  Because they have your product and your money.  They decide if and when and how much you will be paid.

Collectors can influence their actions, many time spur payment, but cannot control their actions.  In other words, collectors cannot make customers issue payment, but they can react appropriately to the collection problems encountered. How?  Perhaps by reducing their credit limit.  Possibly, by withdrawing the open account terms.  Maybe by halting any orders in production for that customer.

Michael Dennis, MBA, CBF, LCM

Michael Dennis, MBA, CBF, LCM

What you decide to do should be based on what the debtor says and does.

By Michael C. Dennis. Michael is a consultant and the author of the Encyclopedia of Credit, a free, fast online resource: www.encyclopediaofcredit.com

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