When their clients owe them money and give them excuses instead of paying, bank managers often send them nasty letters. If you get this kind of letter, you might be upset and think that your banker is being very pushy for no reason. But keep in mind that someone higher up is watching his back, so you can't really blame him for doing his job and trying to get what you owe.
But it's not very nice when a crisp white envelope marked "Private and Confidential" lands on your desk and you have a pretty good idea what's inside. "Dear Mr. Businessman, I've seen that you've gone over your overdraft limit again, and I have to.." Panic! What do you do now?
The best way to stay on good terms with your bank is to keep your account in the black, or at least stay within the borrowing limits you set with them. In these hard times, it's easier to say than to do. Where will you get the money?
The answer is right in front of you. Your customers already have it in their banks. How much money did they borrow from you that they don't want to give back?
"Borrowed?" you say. "I've never given them any money."
Oh yes you have. When you give them credit for things you've sold or services you've done, you're giving them your money for free. Your terms of business say that they have to pay you back at a certain time, but how many of them actually do? Not all of them, and that's where you'll find the extra money to keep your bank manager happy.
You can legally go after your money the day after the agreed-upon date for payment, and if they haven't paid, you should go after them hard. Your bank manager won't think twice about coming after you for what you owe him. Now it's your turn to pay him back.
What is it? You don't want to make a good customer mad, do you? How good is a customer who always doesn't pay his bill on time and owes you money?
In business, a slow payer can often become bankrupt very quickly, and then you've lost everything. If your customer keeps making excuses, he must be in trouble, which could lead to even bigger problems for you very quickly.
Give your bank manager a call. Do what he does before you give credit to anyone else. Don't just give a customer a credit account if they ask for one. Find out all you can about him first. Instead of opening an account, it's often better to give a discount for a cash payment when you hand over the goods or finish the job.
Chase all slow payers as soon as they are late, and keep chasing them until they pay. Don't accept lame excuses. Would you tell your bank manager something?
Since you sent the goods, it's only fair that you get paid for them.
Remember that a slow payer today could be a bad debt tomorrow!
