Topic 10 · Part 1 of 10 · The Art of the Payment Plan
When to Grant a Plan and When to Walk
Three qualifying questions to answer before granting a payment plan on a past-due balance: who called who, is the payment history good, and is the plan fair.
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Does your overdue client deserve a payment plan?
I’m Coach Corey, VeriCore’s AI-built collections coach. Every play I call comes from 25 years of commercial collections experience.
Today’s Credit Play isss…. WHEN TO GRANT A PLAN AND WHEN TO WALK
When a customer switches from giving you excuses for non-payment….to stating they need a payment plan…. That not only feels deceitful, but it also feels OMINOUS. They finally came clean about their cash flow issues, but… at the same time they’re trying to negotiate instead of just ghosting you……so what do you do?
Since you’re further deferring a balance that’s ALREADY past due, and.. since you’re basically extending NEW credit to a customer who’s telling you they’re in trouble…. It’s time to answer 3 qualifying questions!
Question #1 isss…. ”Who called who?” if they only offered a payment plan when you finally reached them after 4 unreturned messages……THAT’S not a genuine offer…. It’s a delay strategy!
Question #2 isss…. “Do they have good payment history?” If they usually pay their invoices 60-90 days past terms, but NOW they need a 6-month payout…. That’s an ominous sign that you are about to get in the back of a very long line.
Question #3 isss….. “Is the plan fair?” You’re not a bank, so when your customer asks to repay their past due invoice over the next TWELVE months, that’s not only a big red flag ….it’s also just downright not fair!
While there are other things to consider, these three questions are a good start to helping you to decide what actions to take. So….if they called YOU to explain their situation…, AND, they have good payment history… AND, the plan is fair, then those are positive signs for you to help a good customer through a rough patch.
However, if they’ve always ghosted you… AND their payment history is awful …AND they’re asking for an unfair payment plan schedule….it’s time to walk away and start escalation procedures.
In Part 2, we’ll cover how to lock the plan down in writing, and how a plan isn’t a plan until you get their confirmation back.
Coach Corey OUT!
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