Debt Collecting Q & A – Issue #8

Dear Jim –

My company sold $3,200 worth of merchandise to another firm some six months ago. When I attempt to pursue payment I learn that the person who placed the order has left and the company claims not to have ordered the product and refuses to pay. What do I do?

"Confused in St. Cloud"

Dear Confused:

The biggest problem you face is not that the purchasing agent has left, but that the debt is old and becomes more difficult to collect with every passing day. Six months is a long time for an account to be past due. The agent who purchased the software was acting on behalf of his employer when he used credit to buy the product and the company is fully liable. You will need all of your documentation to prove your case. A contract does not terminate when an agent of the company leaves. You'll need to educate the company with a firm call placed to the right person. Don't make your argument to anyone who is not a decision maker. Go right to the top and talk to the president or owner. That's a large part of the battle.

Is the argument he gives you the same as you've heard from the accounts payable people? Sometimes the reasons given for non-payment vary depending on whom you're talking to. So listen before you go after him. Here are some points you might make:

Do they, themselves, write off any debt they incur when one of their client's representatives leave?

As a leader of the company, does he consider himself an honest man? If so, how does he feel about using your product without paying for it?

What is the company's status? Are they hurting financially?

Are they frequently sued for non-payment and do they expect credit to be extended to them?

Is he aware that when a judgment is taken he is responsible - not only for the full amount but for the accrued interest and the collection costs as well?

Continue this line of questioning going until you get to the Heart of his problem – that may well lead you to a happy conclusion.