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You know the saying: misery loves company. Inc shares in a series of articles the biggest business fails that everyday small business owners have to deal with. This installment gives you three stories of customers who won’t pay. Here’s one:

1. The Hat Trick

When otherwise good customers don’t pay on time we always call right away. We can’t make them pay—I wish we could—but if they will not be able to pay soon we need to know so we can manage the cash flow issues their late payment eventually causes us.

We had just gotten a new customer and they immediately became a sizable chunk of our revenues. Then they didn’t pay. I called.

“We should be sending the check soon,” their accounts payable clerk said.

“If I can ask, how ‘soon’ is ‘soon,’” I asked.

“Well, it depends,” she said. “Might be in a week, might be in a few months. It’s just the luck of the draw.”

“I don’t understand,” I said.

“It’s simple. We keep all unpaid invoices in a basket. Each month we draw out six of them. If yours is one of the six, it gets paid. If not, it’s in the hat for the next month.”

“That doesn’t make sense,” I said. We might have to wait a long time to get paid.”

“Oh, I wouldn’t worry about that,” she said. “If a few months go by that means you might have three or four invoices in the hat, so the chance we will pull out one of yours is a lot higher. If you get lucky, you might even get two or three pulled.”

We never did get ‘lucky,’ and eventually we stopped doing business with them. That was one time I didn’t mind losing a major customer to a competitor. - Erick

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