Handling skips 101

June 15, 2022
Customers buying tools, but not following through on payments. It's the worst, right? Gathered below are our top tips for handling skips.

One of the biggest issues Professional Distributor readers tell us they have is with collections. Customers buying tools, but not following through on payments. It's the worst, right? Gathered below are our top tips for handling skips.

Tip #1: Understand the cost of skips

When a new technician shows up at one of your stops, do you do your due diligence on their creditworthiness before you trust them with your money? Skips may cost more than you think.

Let's look at the issue of skips financially. You sell a product for $145 with $30 down. Your receivable is $115. Granted I am using estimated cost and profit numbers, but you will need to sell about $500 just to cover this loss. So, for every buck you don’t collect, you need to sell about $4.50 just to break even. 

Read the full tip here.    

Tip #2: Prevention is key

Though not always possible, there are steps you can take to help prevent skips. 

Start with getting the new customer to completely fill in and sign your customer profile information document. Call their previous employer. Take a picture of their driver’s license and their vehicle including the license plate. This may seem invasive to you, but you are lending them your money. You have a right and need to know who you’re doing business with. 

Read the full tip here

Bonus tip: When it comes to giving a technician credit, you may want to set some rules. Independent mobile tool dealer, Jeff Cothren has been in the business for over 19 years, and his general rule of thumb for giving credit is that the tech has to have been working at their job for at least three months.  

Tip #3: Spotting skips early

Future "skips" start sliding early...Catch them first!

Bruce Holsinger, a Mac franchisee in the Cincinnati area, knows it's important to watch for the red lights that a customer is likely to fall behind, and to keep them in check before they are seriously delinquent.

"He'll start to dial back his payment," says Holsinger. "When a customer says 'I'll be $10 short this week,' you've got to be sure they know you expect that $10 next week."

Read the full tip here.

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Tip #4: What to do if a customer isn't paying up

All the caution in the world will not eliminate late payments and skips as they are a fact in your business life. They need to be handled quickly and firmly and, unfortunately, our legal system says you can’t be like Tony Soprano sending your monster collection encouragement agents to motivate your customers’ repayments. So, what can you do when the need for collections happens? 

Read the full tip here

Tip #5: How to get in contact with a skip

Text them 

Get what you want from them by pestering them the way they do to you when they want a tool. 

Read the full tip here.

Utitilize social media

Friending your customers "pays" when they skip town with a bill.

Read the full tip here

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