When he's pursuing long-overdue receivables, A. Emmet Stephenson Jr. doesn't believe he'll never get paid. The chairman of StarPak, a $20-million software manufacturer and support-services company in Greeley, Colo., swears by the strategy of tracking unpaid bills "for a very, very long time." "We won't put executive effort into tiny bills, because that isn't cost-effective. But with any overdue account over $5,000, we're pretty relentless. We'll be their worst nightmare," says Stephenson.
Here's why he recommends the strategy:
It's unique. "If you make your company stand out as the one that won't go away, a lot of deadbeats will pay their bills to get you off their backs."
It's inexpensive. StarPak chases late payments by mail and telephone weekly for the first year and monthly thereafter. "For 29¢ a month, why not keep sending your bill?" Stephenson asks. With one customer, StarPak did that for four years, until the wrong executive got its bill and approved payment.
It pays off. Popular wisdom notwithstanding (see "Un-receivables," [Article link]), Stephenson has been able to retrieve two- and three-year-old receivables collectively worth more than $100,000. "Sometimes a company's management changes, and the new executives decide to clean up their payables," he explains. "Other times, companies genuinely want to pay, if they can just get their own financial houses in order. So we wait for them."