Dear Crabby,

I wish I could tell you that I had a nice holiday and new year, but something was gnawing at me dampening my holiday spirit. Let me explain. 

I have been the credit and collection manager at a mid-size industrial electronics part distributor for the past 15 years. I love my job and I always try to accommodate the credit needs of our customers as best as possible. 

One large and long-term customer started to become past due in early 2021 and by the summer, was significantly delinquent by about five months. Although they were continuously sending us small payments along the way, it appeared they were possibly going out of business. In this pandemic, with supply chains affecting the viability of so many companies, as hard as it hurt, I decided not to provide the same level of credit to this customer. This credit decision, however, is not the problem. 

The president asked me in early December if there are any customers that he should put on his holiday gift list, and I reminded him about a few of them but also suggested that he refrain from sending a gift to the past due customer I’ve explained here. The president asked me about their situation and I informed him that things don’t look very good. . Although he seemed uneasy about not sending something, I guess he felt he should follow my suggestion. 

The upshot is that on the last day of the year, an ACH wire transfer arrived from this customer for payment in full. While I was happy about this payment, I immediately went into guilt mode because of my suggestion to refrain from sending a holiday gift. In thinking about the situation, even if this customer was not in good financial shape, in view of their loyalty over the years, I should have thought more in terms of kindness to them. 

How should I proceed from here?

Signed: Still Feeling Guilty

Dear Feeling Guilty, 

Please don’t beat yourself up too hard. We’ve all made these kinds of non-credit related decisions and later on have regretted them. I can see sympathizing with your original feeling since all signs at the time where leading to a customer that might have soon been bankrupt. The good thing is that they have paid and now I would like to suggest a couple of items to do with this customer. 

1) Find out how they were all of a sudden able to pay you. Did they get a bank loan? Have they brought in an outside investor or partner? It’s very important to clarify how it appears they were able to fulfill their payment obligation to you. 

2) Once you have a better idea of their financial situation, you can begin to accommodate their potential purchasing and credit needs. As you mentioned how you previously restricted their credit limit, what is their purchasing plan going forward and will they require more credit?

3) What will be the safeguards in the event they start to delay again? Because of the long-term relationship, I gathered that your company did its best to continue to sell to them despite the past due A/R balance. You may need to consider a whole slew of new payment, credit, and guarantee considerations. As you are well aware, it’s not unusual for some customers to have a kind of boomerang payment performance. In other words, they’re caught up today but six months or more down the road, there may be another one-time payment to shore everything up. 

4) As far as a gift is concerned, Valentine’s Day is just around the corner. Regardless of where they are at that time, feel free to send a nice box of chocolates. It will certainly be an unexpected surprise, much appreciated, and will hopefully alleviate your feelings of guilt.

I hope the above helps. Please let me know what happens. 


Dear Crabby is a credit, collection, and human resources advice column by Nancy Seiverd President CMI Credit Mediators Inc. Your thoughts and comments ( are most welcome!

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