Credit Matters Blog

Do You Empower Your Customers NOT To Pay You?

Kim Radok 07 November 2011


To succeed in business, and achieve maximum outcomes, your business needs a champion team of employees. When this situation occurs, all stakeholders in the business; owners and management, employees and customers, enjoy the benefits.

The business which has a team composed of champions and drone employees, may succeed. However this business will never realise its potential because  the stakeholders will be motivated by different levels of satisfaction.

In this second business, with these differing levels of employee status, you will find customers are empowered by the three Rs, to buy, but NOT to pay.

So what are these three Rs? I call them




Respect - all employees deserve respect, no matter their role in the business. Customers quickly learn whether their suppliers' management and sales team respect their own credit/accounts receivable employees.

The simplest example of this, is when the customer complains to the supplier's sales and management about being placed on stop supply. If the stop supply is lifted without the customer having to make any payment or commitment to pay, the customer knows the supplier's credit/accounts employees have no real authority to stop supply. 

Without any backup from their own management and sales, the supplier's credit/accounts receivable employees authority is eroded. Therefore any contacts or ultimatums made regarding outsanding invoices, are deemed to be meaningless by the customer.

Resources - all employees need the best resources to do the best job. Management empowers customers NOT to pay on time by reducing resources available for credit/accounts receivable employees to do their work effectively.

Whether these resources are a lack of access to suitable software packages or sufficient people to make timely telephone contact, or a lack of education and training, makes no difference. The customer is empowered NOT to pay because there is no one to contact them, and if there is, the employees are not educated to deliver best practice contacts.

Rewards - management shows the credit/accounts receivable employees they are not valued if they do not reward these employees as they would a sales team for achieving targets and special results.

Credit/accounts receivable employees are like everybody else. If they are not motivated to achieve best practice or outcomes they may well empower the customer NOT to pay because they aren't interested whether the business gets paid either. They just do their job as best they can.

There are many ways a business can empower its customers NOT to pay them. Most of these ways are subtle and not always seen, e.g. the three Rs above.

To maximise customer attention and adherence to your own business's payment terms, it is important to understand how your business empowers the customer NOT to pay.

May you be paid today rather than tomorrow.

Kim Radok