Dear Crabby,

I’m at my wits end and I need to vent! To make a long story short, as the credit and collection manager at our mid-sized home interior decorating company, I’ve got dozens of past due accounts where the customer wants to pay but is holding back until we complete the work. Sometimes the work is for things that our crew did not do correctly and even though they’ve gone back two or three times to correct the issue, it’s still not meeting the customer’s satisfaction. Other times, we installed some item that was not quite the correct size, color or other feature and it needs to be replaced. Regretfully, these past due accounts are not delinquent because of the customer’s inability to pay but due to a dispute against our work.

As a result, I spend a good portion of my time apologizing for the mistakes and the delays. I am constantly following up with our general manager to get these lingering problems resolved but sometimes it’s taking more than a year. Not only are these past dues skewing our DSO, they’re crimping our cash flow and our company president looks at me as though I’m not doing my job. What can or should I do?

Signed: It’s Not My Fault



Dear It’s Not Your Fault,

First and foremost, I agree that these problems and your company’s cash flow situation are not your fault and generally speaking, construction related businesses are often prone to having a few major problems that include:

  1. The products and equipment ordered do not meet specifications.
  2. The work is not properly performed which results in mistakes and do overs.
  3. Changes to the products ordered or the installation during construction are not properly documented and/or authorized.

In order to minimize some of these problem, it’s imperative that:

  • The individuals who are in charge of measuring and ordering the products may need to have second and third reviews to confirm accuracy.
  • Even when products or equipment are perfectly ordered, they still need to be checked before an installation is performed, and in some cases sent back to the supplier due to their manufacturing mistakes to be modified or even refabricated. Sometimes when the product or equipment is not exactly what the customer ordered, the differences might be small enough so that the customer can still be satisfied. The key is to obtain any changes acknowledged and signed off by the customer to eliminate objections to payment down the road.
  • It should go without saying but standards of work quality being performed need to be established and thoroughly supervised during the project.

Create a table outlining the problem accounts as follows:

  • Customer name
  • Reason for non-payment
  • Person in charge of resolution
  • Estimated resolution Date
  • Actual resolution Date

With your table in hand, working with your manager, maybe the CFO, or the president himself, you will at least present an organized structure to the problems that are preventing you from collecting. Realistically, until these product and installation problems are resolved, all you can do is to stay in touch with the customer, letting them know your company is still working on the resolution. Although this may not be part of your job responsibilities, it will at least prevent the account from going cold and possibly uncollectible.


Dear Crabby is a credit and collection advice column by Nancy Seiverd, President, CMI Credit Mediators Inc. Your thoughts ( on what to advise are most welcome, and with your permission, we’ll reprint your comments in the next issue of our newsletter.

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