photo karate kick accounts receivable trainingIn this life of ours, by design or accident, one will find themselves in harm’s way. The August issue of Black Belt Magazine carried the advice that in the context of combat sport, you do not necessarily need to win; you merely need to fend off the attack long enough to get away.

In those situations, you need to detect, defuse and defend. Known as the three D’s.

You become a harder target when you are better able to detect a threat. Identify a situation and perhaps cross the street or turn around and walk away. If a situation is unavoidable, perhaps words may be used to calm a person who is about to become violent. If the situation continues to escalate and you cannot escape, you need to defend yourself, sufficiently to enable an escape.

Most of my clients grant credit for one reason and one reason only: To complete a sale that could not be completed with cash. It gives us the opportunity to increase sales, profits and market share. However, because non-payment by customers is the biggest cause of business failure we are placing our business in harm’s way.

Having all customers pay on time as agreed is winning, but not always practical or possible. We may be able to fend off the attack non-performing loans by reducing the loss – allowing our firms to get away – survive and thrive. It comes down to effective accounts receivable training.


A tagline for the television series “The X Files” was: The Truth is Out There.” All too often, bankruptcy papers are received and when you talk to the sales representative, he or she says, “I could have told you that!”

You may be taken by a ride from a few customers, but with the internet, personal visits with your customers, improving communications with sales, joining groups and associations, in this information age, there is no excuse for being taken by surprise in debt collection management.


Don’t get me wrong here, you need to be assertive. After all, you have a good product or service and deserve to be paid – on time. But if you come on too strong, even the most timid of customers will take offense.

“You have an outstanding account that I am certain you would pay if you could and I have an invoice to clear up as soon as possible. We’re on the same side here, how might we be able to work together?”

There are a lot of ways to defuse a difficult situation. Don’t be a one trick pony, have as many of them ready and available to you as possible. Your favorite sports team does not write out a new play and then put it into action on game day. They will try it out and improve before they take to the field. You should do the same and try them in a role play situation to have them sound natural and to work for you.


When push comes to shove, you must take appropriate action to defend your receivables asset, your business and your reputation. It could be repossession of property, legal action or other activity. By delinquency age or perhaps broken promises or threat to our asset, the customer has crossed the line.

If you are going to take action, in particular if you have told them “if you don’t do this, we will do X”, then follow the Nike slogan and ‘just do it’ – quickly, no pussy-footing around.

Of course, your customer will not like our decision. But even in situations like this, you can take action and treat them with respect, allow them to save face as best as possible. It has been said that a diplomat learns how to tell you to go to hell in such a way that you look forward to the trip.

It could be time to discuss a settlement or maybe even a write-off and forget about it. A successful escape in a bad debt situation is the actions you take to collect as much as possible at the lowest cost.

Pithy Quote:

“A punch should stay like a treasure in the sleeve. It should not be used indiscriminately.” – Chotoku Kyan (pioneer of Shorin-ryu Karate)