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Comments on dumping constantly late paying customer / ACH and credit cards
November 16, 2021
Comments on dumping constantly late paying customer / ACH and credit cards from article on November 9, 2021
          With respect to the company with the constant late paying customer: In the All in One contract if termination is done for the late paying customer who is in breach of contract, would that mean that the late paying customer is on the hook to pay the 80% of the remaining unmonitored period?
          Not that I would force that upon termination, but it might be a notice to the late paying customer to get on the ball and honor their signed agreement.
          However, if this customer is always verbally abusive all the time it might be best to just get away from him. Everyone has a bad day but, it should not be bad every day.     We are licensed to do fire and security, not psychological consults. 
          My license reads “attorney and counsellor” at law, so sometimes I get to dispense what might be considered psychological advice.  It often goes hand in hand with legal advice.
          If you use the All in One, and your customer terminates the contract before the entire term has run [5 years residential; 10 years commercial] then the customer owes 80% of the remainder of the term.  If you own any equipment at the customer’s premises you get to sell it to the customer for the amount stated in the contract as the agreed value of the installed equipment, less 20%.  You also get your legal fees and costs. 
          You state that you wouldn’t enforce the contract if the customer defaulted.  I hope your customer’s don’t know that or take advantage of that.  Probably be a good idea if your competitors didn’t know about that.  Also, if you have any business loads you lenders probably don’t want to know about that policy either. 
          If as customer breaches the contract your loss is more than 80% of the remainder of the contract term.  Why?  Say you’re getting $40 a month.  Customer stops paying [or more to the point of this article, you get tired of chasing the late paying customer] and you declare the default.   There’s 24 months left on the contract term and 80% of that equals $768.00.  But there’s another potential loss and reason for not allowing a customer to terminate if you don’t have to.  The $40 a month account adds $1400 in equity to your business.  If you sell the accounts at 35 times a $40 a month account is worth $1400.  Are you thinking that the account would be lost anyway and wasn’t salable?  Well that’s one possibility, but another possibility is that the customer was having a bad day and decided to terminate, or some other momentary issue that may have caused a termination.  But if that moment passes this customer who would have canceled may turn out to be very good long term customer.  K&K Collection Department is particularly skilled at saving accounts as long as we get the assignment quick enough, before your system or service has been replaced.  Obviously not all accounts are salvageable, but many are.
          Abusive customers are another matter.  Some alarm company owners and employees who have to deal with the customers have thicker skin than others.  Can customers who pay on time be a little more abusive than those that constantly pay late? 
You’re a business owner and you deal with the public and all kinds of people.  Get use to it.
Another comment
          I have a policy that the customer must pay via ach it’s in the contract and we get that information at signup. No ach, no alarm, period. Also keep in mind that a customer can file a chargeback at any time.  Just because you get paid via credit card does not mean that you are irrevocably paid.  Most credit card companies allow the customer to go back up to 180 days; it’s a process called a chargeback where they yank the money right back out of your account as if you were unauthorized to charge it in the first place and then you have to fight to get your money back. 
          That’s not possible with an ach from a bank account.  Once you get paid there is no charge back.  Also, don’t forget the credit card fee of up to 4.5% for the PRIVILEGE of accepting a credit card.  Credit cards expire, checks get lost in the mail, but ach lasts forever… just my two cents from someone that’s been there.  I prefer ACH and the K&K All in One came with that form.  Thanks
Anthony Vanhorn
The Security Guy
Gleason TN 

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