Jun 20, 2018

How Much You Really Lose When Customers Won’t Pay

Do you ever have a customer who won’t pay their bill for your service? Debt is a very important issue when it comes time for customers to pay their bill. There are a lot of reasons why your customer won’t pay for their bill. But regardless of why, do you know how much this is actually hurting your business?

Why Does This Happen?

There are a variety of reasons why customers don’t pay their bills. Maybe they were expecting the bill to be lower or at a later time. Perhaps they literally lost the invoice and haven’t bothered asking for a new one. Maybe the customers either forgot to pay or just can’t pay due to financial issues in their life. Sometimes customers dispute businesses about the percentage of the work that completes the project.

It’s possible that employees of your company didn’t do as good a job as the customer was expecting, and the customer doesn’t want to reimburse you for what you think you’re owed. There are many reasons, which vary by the customer, your service, and your business. (

Your Service & Product Costs

Do you know how much it costs your business you provide a product or service to a customer? How many employees completed the service? How much did you spend creating the product? There are a lot of different costs associated with the service or product you provide, that your customer should reimburse you for.

Do you know the kind of costs associated with a regular dental checkup? In most states, a typical dental exam could cost you between $50–300 per visit ( When patients receive an x-ray and/or basic cleaning, that means more hours the employee is spending on that customer and more use of expensive dental radiographs. Let’s say a dentist office serves 5 patients a day with x-rays and/or basic cleaning, for 5 days a week. After 1 year, that would contribute $65,000–390,000 to the dentist office, or bring the office that much into debt from customers who don’t pay. If a dentist office accumulates $65,000 in debt from a bad customer, then that’s just how much they have to make additional to stay in the green. Either make up additional revenue or work with a collection agency to get back the money that’s owed to them.

As a business owner, you need to consider how much work you put into the service or product and determine how much you’re losing when your customers don’t pay you. Review your profit margin is, how much you’re losing out on with a missing payment, and estimate how much new revenue you’d need to make up the debt you’re receiving from bad customers.

If you are looking for an opportunity to regain lost profits, contact Prestige Services Inc. by phone at (800) 523-2797 or via our contact form.


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