When delinquent customers hear from this credit manager, it must be like hearing their own consciences talking. He knows what they've done before, what they're doing now, and what they're capable of doing. How can you ignore--or try to mislead--someone like that?

Every really successful collector has a carefully devised and usually unique strategy for going after delinquent accounts. For Thomas Byrne, CCE, Credit Manager for SKW BioSystems, Inc. (Waukesha, Wisc.), which manufactures products for the food ingredients industry, it's a rigorously customized approach. "I get to know as much as I can about all of my customers," says Byrne, who does this in four ways:

1. Keeping track of each customer's payment history over time.

2. Staying tuned into each customer's current payment pattern.

3. Making telephone contact on an as-needed basis to get information on current payment situations.

4. Monitoring customer responsiveness and timeliness to requests for payment.

"Then, as much as possible, based on what I continue to learn about each customer, I try to create a unique program or each customer,' he continues.

How many different situations can occur? He discusses some of the basic ones, each of which can work in combination with one or more of the others to create truly unique payment environments and collection challenges.

Payment Timing

Timely. Some customers almost always pay in a timely manner. These, of course, need little attention, except an occasional special message to express appreciation for their efforts.

Late. Others may only arrange to make payments when Byrne places a call to them to seek payment. How he handles this depends on some differences between customers, the first of these being the size of the customer. SKW Bio-Systems sells to customers ranging from "moms and pops" who place $250 orders to large customers ordering $100,000 at a clip.

Large Customers

When large customers fail to pay in a timely manner on a regular basis, the most common excuse Byrne hears is that the customer either "lost" or "didn't receive" some necessary paperwork (e.g., invoices and proofs of purchase).

Early resolution. For the first two or three times, Byrne will fax the missing paperwork immediately. Often, the customers may not report any or many more such problems in the future.

Later resolution. However, if the customer continues to use this as an excuse, Byrne will challenge the customer, explaining that they need to get their processes in better order. If customers do so, the problem is resolved. If not, Byrne will ask the salesperson to talk to the customer and attempt to resolve the issue. If this doesn't work, Byrne may hold that customer's order. In sum, each result tends to be different, and Byrne responds accordingly.

Small Customers

When small customers fail to pay in a timely manner, it is often the result of one of two things:

Disorganization. "Many small customers can lose paperwork, forget to pay their bills, or just be too busy to get around to it," according to Byrne. When calling such customers, he frequently utilizes some humor to "break the ice" and get the conversation started.

He knows some customers well enough that, once he calls, they will promise to make payments and will indeed place checks in the mail that day or the next, true to their word. In such cases, he will agree to allow current orders to be shipped at the same time.

He also knows others well enough that, even if they promise to mail the checks that day, they will not. "In such instances, I tell them that I will not release their current orders until we actually receive their payments," he says.

Cash flow. A second problem that small customers can experience is weakened cashflow. Again, he knows his customers well enough to handle different ones appropriately.

He knows from experience that some may be of good character and have temporary cashflow problems. In such cases, he will let invoices slide a bit and work with the customers to help them get caught up. "When they get back on their feet, they remember us," he says.

He also knows that others chronically have cashflow problems and are not always true to their word when it comes to honoring payment arrangements. In these cases, he becomes a bit more assertive in collections, rather than being flexible.

Early Calls

When Byrne becomes aware of the customers who tend to pay late--but who also tend to make quick payments when they are "triggered" by a phone call--he may arrange to call them a few days before invoices are due, so that payments can arrive in a timely manner (rather than a few days late). Again, customers react differently:

• "Some will make payments as soon as I call, even if it's a couple of days early," he explains.

• Others will not, preferring to stall a few days. In such cases, Byrne may remind them that the shipment of their current orders will depend on the timeliness of their payments. That is, with the company's integrated software program, the shipping department does not even know about pending orders until Byrne releases them from his office. Thus, if a customer pays late, Byrne will not release that order until payment arrives, which can delay the shipment a few days, since it will end up coming in behind other shipments that have been released earlier.

The bottom line is that almost no two customers are ever alike, and an almost unlimited combination of circumstances and behaviors gives each customer an almost unique profile. Once Byrne is able to create a profile for each customer, he responds to any delinquency accordingly.