Real Life Case Studies included in the book

This case study underscores the importance of thorough credit assessments and cautious credit policies, instead of relying on appearances.

A mining supplies company suffered a major financial loss after extending $50,000 in credit to a new earth-moving customer without proper checks. The customer then defaulted and went into receivership.

Read what the manager should have done to reduce the risk of unpaid customer debt in my book 📖 Don’t Let Your Customers Run Your Business.

When a local builder went bankrupt, over $300,000 disappeared from the small town’s economy, affecting 32 mostly trade-related businesses and their dependents. Many encountered significant financial difficulties, and the unpaid bills and narrow profit margins caused widespread struggles as businesses found it increasingly hard to meet their ongoing expenses.

This case study underlines the impact that one business owner’s financial problems can have on a wider community.

This case study outlines the ramifications for a labour hire business that fails to pursue overdue seven-day invoices promptly, as well as the consequences of not containing the debt with timely interventions.

The impacts are presented in a table format for clarity.

The challenges faced by trades-people, in this case study, illustrates the difficulties in obtaining payment, which stem from the agent’s communication practices, the trades-person’s specialised expertise, and the differing expectations of both the landlord and the tenant.

These problems show that, despite having effective policies and strategies, an enterprise may still struggle to recover outstanding debts. Nevertheless, being well-prepared enables organisations to respond to these problems promptly and helps minimise the risk of non-payment of invoices.

An example situation of customers who have no intentions of paying are illustrated in this case study.

A young copywriter invoiced $300 for an advert, but the client, who did not intend to pay from the outset, refused to settle the invoice.  Sadly, it resulted in the copywriter’s work going uncompensated and leaving her feeling exploited.

This case study illustrates what happens when a plumber verbally quoted a $5,000 job for a hairdresser, with no written contract or clear payment terms. Trusting the customer’s promise to pay, the plumber continued working, but the customer ultimately couldn’t pay.

What should the plumber have done? Read the full story in my book 📖 Don’t Let Your Customers Run Your Business.

Relying on verbal commitments without securing a firm agreement places a business at risk as this case study shows.

An electrician purchased an expensive air conditioner in good faith, only for the customer to cancel the job before installation. Unable to return the equipment, the electrician was left out of pocket.

What should the electrician have done?

Deciding who is liable for payment can be difficult with a third party involved.  This case study is an example of how to decide.

A developer ordered a site survey by email and was invoiced several thousand dollars. When payment was requested, the developer tried to shift liability to the property owner.

What did the supplier do to get paid? Read the full story in my book 📖 Don’t Let Your Customers Run Your Business.

How to deal with refusing credit to one-off sale customers is demonstrated in this case study.

The manager of a regional glass and aluminium business and needed to address frequent non-payment from tenants seeking repairs before moving out.

The strategies the business set up so they got paid is explained in the book 📖 Don’t Let Your Customers Run Your Business.

This case study highlights the risks of extending credit by default when employed tradespeople complete jobs without collecting customer details or notifying the office. Without proper information or processes, prompt payment becomes difficult.  

What was the outcome?

This case study continues the story and the consequences from Case Study 1, where a manager extended $50,000 in credit over 60 days to a customer whose business went into receivership.

What was the result?

This case revisits the plumber from Case Study 6, who completed a job for a hairdresser worth $5,000 without clear payment terms or an upfront deposit.

The story highlights the importance of securing deposits and assessing customers before starting work to avoid risking non-payment and cash flow issues, and what you can do in this situation to get paid.