Most of the time, we welcome a new customer with high hopes. Hooray! A new customer relationship! Here’s to years of success and happiness together!

Doesn’t always work out that way, does it?

Not every customer is one worth having even if you thought they were in the beginning.

Customers that require tons of extra time just to pay a simple invoice are a good example. When the math is done, having your staff pour hours of time into phone calls and letters for a small invoice simply doesn’t make money sense.

A yearly review of each client can help you determine if there’s a “money drain” in there somewhere. To help determine if you need to face a possible break up, take a look at the following and see if any apply:

1. The Customer Pays Slow Consistently

Weigh the cost of chasing your slow pay down every month when the bill comes due. Do you or your staff consistently have to remind, chase, prod and poke to get a check? All that time is money. Maybe it is worth it for you when you do the math … maybe its not. Sit down with a calculator and translate the time into money to make sure you’re not losing money in the chase.

2. Rumors Surround Your Customer’s Business

Did you get wind of an industry rumor that a customer is languishing financially? Do some digging to get to the truth. It may be useful to contact some of their credit references and to investigate their purchases of late. Is the company contracting or hiring personnel? Contracting sometimes signals a decline in business, while hiring may suggest expansion.

3. Your Sales Team is Concerned

A typical sales team sees it all. They see when the shelves are sparse. They’re painfully away when purchases slack off. They often detect a tone in their customer and sometimes find themselves handed information on a silver platter when things aren’t going so well with a customer’s business.

Keep those lines of communication open with your sales team. Review customer files and request their feedback. Your sales team is your first line of defense!