Handling Customer Deductions

You now have a credit-approved customer who has been doing business with you for a couple of months. They have been paying on time and placing steady orders. Suddenly you receive a check with a deduction on it. It might just be a negative number listed on the check stub, or maybe the check is just for a bit less with no explanation. Whatever the case, deductions can impair your cash flow and take up valuable time, so you want to always address them right away. The more time you let go by before handling this issue, the harder it will be to get paid back if it is not legitimate.

When you receive a payment with a deduction, research it immediately. If you need to provide paperwork to the customer regarding the deduction, call them and tell them it is coming, and ask if they need any other specific documentation that you can include. Send the paperwork via certified mail with a signature, or use a flat rate priority mail envelope. When you receive notification that they have the documents, call them right away to find out the status. Do not get caught up in the game of sending the documentation two or three times; this is a stalling tactic. Stay on top of the situation and resolve it as quickly as possible. You also can fax or e-mail the documents for quicker resolution. Make sure the customer sends the payment immediately; do not allow another 30 days or any more time to pass.

If you have a customer who takes frequent deductions, you will want to note ...

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