Collecting debts

Decisions about collecting debts are important due to the influence they have on maintaining durable business relationships. Because our business belongs to God, maintaining a good reputation, both for myself and the God we serve, is extremely important. Management of debtors must be governed by a balance between making sure payments are received within the agreed timeframe, and active cooperation to help solve payment problems.

Jesus was described by John as being ‘full of grace and truth.’ We want to deal with our debtors based on truth by delivering good products, keeping our promises, and proactively ensuring payments are received. We also want, as God’s representatives, to demonstrate grace to our debtors whenever they have difficulty meeting their obligations to us.

Managing receivables in business is finding this balance between grace and truth. If a customer genuinely cannot pay, and we would bring him into more trouble by insisting on payment, can we apply grace and help the customer to solve his problem? This may cost us, but the Proverb says that a good reputation is better than money!

If a customer will not pay, and expressly uses us, we should apply truth and do all we can to make him pay– even to a last resort of legal means. The debtor must then be held accountable.

Our company made cleaning and sanitising products for the food industry. One of our independent agents, specialised in the meat processing industry, was an excellent salesman, but (as is often the case) a terrible administrator. He could not pay his invoices on time. This frustrated our credit controller so much that he was threatening legal action which made our agent angry. I decided to step in and visit the agent at his home office. I immediately saw the problem. He did not have a filing system but a ‘piling’ system. Some invoices were lost, correspondence unopened. We solved the problem by buying his business, taking over his debt, and employing him as a salesman. This gave him a well-paid job, servicing his customers and we managed the invoices. He was very happy and so were we! Applying grace was profitable for both parties.

Question of the day
Not paying bills on time is a sure symptom of underlying problems. Are there opportunities to help your customers and show God’s grace?