It is a word we hear more often than we like and one we hear more of with the advent of COVID-19: ‘can’t’, as in, ‘I can’t pay you.

“How can you collect a past-due account or an invoice,” I have been asked many times over the last few months, “from someone who has no money?”

My answer appears to be amazingly simple, “The same way you collected from someone who had no money before COVID-19: you don’t.”

Blood from a turnip and all other analogies, if they have no money, you are not going to collect it.Mind you, I said ‘appears to be amazingly simple’. The real answer, the one you need, is a bit more complicated.

The issue is not the virus, but the effect upon income, expense or a combination of both. An individual may be out of work or they or family faced illness and expense. If it is a business, they may have had to close their doors for a time, or their customers did – with the same effect.

In a way, we are dealing with the same reasons we have been hearing for many years, but there are more of them and though the excuse may not be new to us, it could be to an organizations or individuals who never had such financial challenges in the past. In receivables management, there is always the need to classify debtors into four categories: can, can’t and will, won’t.

  1. Ask for the money – always!The biggest mistake in collections in BC (before covid) as well as after is the absence of a clear and eloquent request for payment in full. Maybe your customer is not able to make the full payment, but you should always start out with the belief they can and act accordingly. Maybe a customer ‘can’t’ pay you, but do not start on that assumption.

  2. Trust everybody, but cut the cards[1]:Some customers, say ‘I have no money’, but if correctly translated, it is: ‘I have no money – for you!’ Yes, it is possible there is reduced income or an increase in expenses, but there is some money, perhaps being paid to someone higher on their list. Also, there are some customers who will use any excuse for non or delayed payment. These fall into the ‘won’t’ category.“Mr. Hanley, of course you can’t pay us if you don’t have any money. I’m sure you can appreciate however, in a large organization such as mine, we will have to confirm a few details before we can move onto the next steps.” You should have a ready list of questions. Don’t say, ‘May I ask you a few questions’, just do it.The next three are based on the presumption you have verified the status of your customer.


  3. ‘We will have to do better than that.’Your customer may have limited funds and can make a partial payment or perhaps a settlement. Their first offer is rarely their best. “Perhaps a settlement may be the best option, Mrs. Wentworth, but the amount you mentioned……I’m afraid we will have to do better than that.”By the way, some negotiation experts will recommend the phrase ‘You will have to do better than that.’, with the emphasis on the ‘you’. I suggest we are walking around to the other side of the negotiating table and working with our customers – so it becomes ‘we’.

  4. Back to the future:Although COVID-19 has increased the numbers of customers you will deal with who ‘can’t’ pay, the percentage of them who ‘will pay’ is higher. These are often individuals and business owners who not only agree they owe you but would gladly pay you – if they could. Your standard time frames for collecting before assignment to a third-party or other action should change. Perhaps the best option is taking details, confirming every couple of months and then working with the customer for full payment six months from now.

  5. No money, but still successful?Okay, not collecting the money if you are in the receivables department may not be considered successful. However, the odds are we are these customers may have the opportunity to do business with our organization in the future, certainly to tell friends an colleagues. How do you want your firm to be remembered? “An assertive group of folks, did their best to collect but were willing to work with me and treated me well.”

A positive attitude on its own, won’t get you far. But, combine it with positive action and you have the best chance of getting thru this crisis, and the next one, and the one after that.

P.S. We have new options for individuals or firms to join and support the profession of collections, including free e-books, webinars and exclusive offers. Please visit.


If you found this article useful, you will ‘love’ my new book, “Panic Instructions – Collections during the time of Covid-19.” Click here