While payment upon delivery is common in retail transactions, it is unusual when selling on consignment or in transactions between manufacturers and distributors. In addition, the purchase of a rather expensive item may be subject to an installment-payment arrangement. Unfortunately, dealing with bad debt is an issue that most businesses eventually face. Do the homework. Rather than just giving up by writing off the debt, you may want to think about bringing in a collection agency.
Collection agencies specialize in collecting payment from overdue accounts and can work in two ways.
For larger debts, they will typically send letters and make phone calls to the delinquent account. People with smaller debts may get just a letter demanding the money. The first area to investigate is how the agency expects to collect debt. Before agreeing to any collection strategy, you must first judge whether it will be effective with your customer. You can do so by examining the letters that will be sent and any scripts that will be read during phone calls.