Discover the 6 types of delinquent payers

Entrepreneurship comes with risks, including the risk of unpaid invoices. What types of delinquent payers can entrepreneurs encounter? Here, we highlight the 6 different types of delinquent payers.

American entrepreneurs often operate on credit, based on mutual trust. While this is an admirable concept, many entrepreneurs experience delayed or even non-existent payments. What types of delinquent payers can entrepreneurs encounter? Here, we outline the 6 main types of delinquent payers:

1. The insolvent delinquent

This delinquent is in financial difficulties and cannot pay the invoice on time. Generally, you can identify this delinquent immediately through a credit report. Limited financial resources lead to this form of delinquency, as revealed in the Atradius study on payment terms in 2021.

Tip: Order a credit report for each new customer for only $12.95 each.

Tip: Enlist the services of a reputable debt collection agency that effectively pursues outstanding payments.

2. The contester

This debtor disputes the invoice due to dissatisfaction with delivered services or products. For unfounded objections, a swift collection process is essential. It is important to determine the validity of the complaint. Additionally, ensure your customers are always aware of your complaints procedure and the associated deadline.

Tip: A knowledgeable debt collection agency assesses not only the legal aspects but also considers maintaining a positive customer relationship.

3. The intentional delayer

This debtor intentionally delays payment to gain personal advantage from interest. This phenomenon is common among large corporate companies. It’s important to maintain higher margins when dealing with companies with longer terms.

4. The negligent delinquent

This delinquent has a poorly organized administration and ignores your invoice. Payment comes when it suits them, without considering your payment terms. These are challenging delinquents to make agreements with. Additionally, it’s difficult to determine whether they are negligent or genuinely unable to pay. Use our credit report for such cases. The most important thing is to avoid or increase margins with such customers as much as possible.

5. The swindler

This customer never intended to pay and has deceitfully misled you. Always be vigilant in such cases.

6. The bankrupt delinquent

The debtor has closed their business due to bankruptcy.

Tip: Verify debtors for emergencies, such as bankruptcy, using a credit report, to prevent unnecessary collection costs.

Be alert to every delinquent payer to limit financial risks. A thoughtful approach, including obtaining credit reports, is essential for your business.