Credit Control and Dealing with Bereavement
Imagine the scenario; you have completed a piece of work for a client, they were happy with the work, and you invoiced them. Then you hear nothing more from them. When you chase up the payment you discover your client has suffered a bereavement.
Now, what do you do?
As an empathetic person you can appreciate they need time to grieve, but as a business owner you need to manage your cash flow.
Legally, there is very little legislation regarding bereavement, with even the Employment Rights Act 1996 only going as far as permitting time off work to deal with an emergency situation which can include a death. It is up to the discretion of the employer to allow time off for bereavement.
Regarding credit control, the situation is similar.
It is up to your discretion as to how to pursue the payment. Whether you apply late fees and whether you bring in a debt collection agency.
It needs to be considered, however, that the way you handle this situation at a most sensitive time in your clients’ life could affect your relationship with them. If you are heavy handed, demanding payment you may never get custom from them again, but if you handle it well it is likely to be remembered and could be the start of a loyal relationship.
A bereavement is a massive upheaval to anyone’s life, and details like payment dates can easily be forgotten.
Someone going through a bereavement, is going through major emotional upheaval at the loss of a loved one but they are also having to deal with a lot of practical tasks as well: organising a funeral, the deceased’s estate, emptying a property, or arranging care for children or pets.
It can be all encompassing. Things like unpaid invoices, and other business considerations take a back seat as there are more pressing things to deal with.
Most people have at some point been through the grieving process themselves or helped someone else through it. Empathy and time are what is required.
But how does this sit with your business and your cash-flow?
In this situation we are dealing with two opposing forces which have equal validity.
- You need to be paid
- The client needs some time to grieve.
This is where good customer relations come into play.
- Communication. Keep a conversation going between you and your client even if it is just to offer condolences.
- Accommodation. In the name of customer relations, you could offer to waive the late fees and to extend the payment date to allow them the time they require to grieve.
- Alternative arrangements. If the client is unable to deal with the invoice payment you could ask if there was an alternative individual who could deal with the business transactions until the client is ready.
There is no right and wrong answer to how you react to a situation like this. You must do what you feel comfortable doing. You may have to be prepared to make some compromises, adjust cash-flow expectations to accommodate a late payment or even write the invoice off.
If you would like to discuss handling credit control, why book a call with us to see how we can help you.