Accountant Come in customers Business owner Thank you for seeing me today. have a problem with one of my major and I was hoping that you could help me I'll be glad to do what I can. Tell me about it. Well, this new software start-up purchased a $10,000 software system from us. Accountant Business owner How wonderful Accountant Business owner Except that now it has stopped paying Did you the customer sign a note as we suggested when we completed your Accountant Business Owner business plan? month for 60 Yes, we set up a note for it to pay a very modest payment per months. And he made the first 8 payments. I was expecting a payment yesterday, but instead he called me to say that he was having cash flow problems and wouldn't be able to make the payment. I am so disappointed in him. The system is his business. But Idon't know what to do now. exactly what he needed to The best course of action depends on what you think are the prospects for your Accountant customer. Do really think that he will be able to pay in the long run? force him Business Owner That's exactly the problem. know that I could bring legal action or even into bankruptcy, since he really can't pay right now. But Ithink I'll get more if wait and let him pay when his business improves. But it would be such a bad example in front of my other clients to just let someone get out of making payments. What should I do? The situation you are describing suggests that you could restructure the note. How Accountant and when could he start pa much do u think he could He assured me that he could pay about $150 beginni as soon as next month Business Owner good news. It sounds as though he is committed too. Now there are That's really Accountant several ways to bring down the payments for your custom er, but still recover your What do you mean Business Owner The payments are calculated to pay off the note in 60 months with a relatively high Accountant interest rate. Those payments would be smaller if you extended the term of the note and let him pay over a longer period Business Owner That's a ssibility Accountant or you could adjust the interest rate you are charging. Since interest rates have come down some over this last year, you might consider lowering his interest rate That would also lower his payments Business owner Sure. It does seem that he made his purchase just at a time when interest rates were at their highest, and I'm using a lower interest rate for my clients now Accountant Finally, you should also consider what to do about the interest that is accruing right now. Business Owner What do you mean? Accountant Even though he missed the payment this month, he still owes for the interest portion of the payment he missed. So during this period he isn't paying, the amount of the note actually getting larger by the amount of interest that is accumulating. Sometimes in these circumstances, you may get more in the long that the additional interest is added into the run by restructuring the note principal and paid alo with the principal instead of insisting on the interest up