Credit Matters Blog

BAD CUSTOMERS ARE NO DIFFERENT TO OTHER CRIMINALS – THEY SIMPLY WANT TO STEAL YOUR MONEY AND ASSETS.

Kim Radok 07 November 2024

As the opening paragraphs point out, bad customers, crooks, and fraudsters, are all people or businesses which have only one intent, which is to avoid paying you. As such, this intent is a criminal act. You can dress up some of their actions as “… a smart strategy to avoid paying”, yet when intent is evident, it proves their behaviour was criminal in nature.

Furthermore, it is well known in criminology profession, that when times are good, people and businesses steal because they are allowed to by their victims. For instance, sales and due diligence practices are lax or ineffective, or management keeps overruling the business’s risk managers and practices to satisfy their own objectives.

On the other hand, when people and businesses steal in bad times, it is based on their need to try to survive financially and emotionally. In these times, their victims unfortunately rarely have the means to financially, or the will power, or knowledge to protect themselves. Furthermore, the courts and other parties create bureaucracies or procedures which do nothing to help the victims in their endeavours to seek redress.

In view that criminal behaviour is likely to increase in the future due to all the negative issues facing us these days, it is increasingly important that you start taking proactive actions to protect your business(s). For instance, I believe the days of 60, 90 and 120 day terms of trade, and possibly even 30 day terms, are now over for the majority of customers and trading situations. In light of this observation what can you do?

First and foremost, business owners and managers need to acknowledge the changes in the world today, and that yesterday’s business practices are often no longer applicable if they wish to protect their business from criminal behaviour. The following proactive actions are an indication of what can and should be taken as circumstances permit.

  1. Employ the best sales, credit and customer service operators who understand the language and actions of fraudsters
  2. Seek out those salespeople that can effectively sell your business’s terms of trade and the advantages of dealing with your business and who are just not order takers.
  3. Employ the above with appropriate remuneration practices which support disciplined work practices designed for the long-term success of both these employees and your business.
  4. Focus on building cash reserves in your bank account(s).
  5. Always concentrate on minimising any outstanding debt owed to, or is owed by your business.
  6. Update and have specialised terms of valid and professionally prepared selling and trading contracts suitable for all types of customers,
  7. Seek cash up front payments where applicable for new and doubtful customers.
  8. Follow up relentlessly on any missed payments
  9. Focus on providing the best quality customer service practices and prompt reaction times to encourage potential customers to buy and make contact if there are problems,
  10. Concentrate on why credit claims occur and eliminate the causes of these claims, plus process all valid claims promptly, etc.

The sooner your business starts practising and taking proactive action, the sooner it will have a better chance of surviving and growing into the future.

Today, the world of business has changed and yesterday’s practices are often no longer valid. As such, it is important to recognise there are businesses and people which have no intention of paying you. Your business must therefore understand that most slow payers, bad customers, crooks and fraudsters have only one intent. That is; to get hold of your cash, goods and services, or other assets without paying for them.

The reality is the above parties are acting as criminals. Unless business owners and managers start realising this fact, they are doomed in these tough economic and business times to suffer unnecessary losses. These losses may prove to be terminal for your business over time.

By being proactive and taking positive actions now, you will start to see the financial benefits to your business by increased sales and profits. It is only through profitable business transactions occurring at every possible opportunity, that your business(s) will survive. If you can survive in the short term, you will also have the opportunity to grow into the future.

Want to know more, contact Kim at kim@creditmatters.com.au, or 0411 649 261, or have a look at what we offer via our website at www.creditmatters.com.au