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Time is money. To a small business owner, there is nothing more stressful than not being paid for their labor or service on time. In some cases, there may exist genuine reasons as to why customers may neglect to pay their invoices. However, often than not, customers can purposefully delay their payments to benefit their interests.
Circumstances like these require business owners to be candid and composed. Here are some strategies on how to approach the situation.
Before producing a wild reaction, first, analyze the circumstances. A first step is always to begin with a polite email or phone call reminder. Be open to listening to your client’s reasons, such can help identify if a customer’s actions were an honest mistake or an excuse on their part.
After, try to weigh your options. To chase after a client with a small debt can be a waste of time if that means it demands your business to spend more money and energy than what the customer owes.
Follow up with your client. If a non-paying client purposefully ignores your inquiries, demand payment more firmly. If the services are ongoing, yet a response from the customer is lacking, do not hesitate to force an ultimatum. In cases like these, it is important to grab the customer’s attention. To do this, provide a demand payment notice and set a specific deadline. A demand payment notice can help outline the debt the non-paying customer owes as well as list the consequences if fees are not paid on time. Consequences can include ending a contract with the customer, suspending any goods or services to the customer, seeking the return of any acquired goods, etc.
Bring in the Legal Team
When an unpaid invoice vastly affects your business’ income, do not hesitate to contact a legal third-party. Consult with your attorney; as a law professional, your attorney should be able to suggest the most appropriate legal course of action in response to a non-paying client.
In addition to providing legal consultation, conferring with a lawyer can serve as the best last resort when wanting a non-paying client to respond to your demand letter. Nonetheless, make sure to not overstep any fair debt collection laws from your country or state. A legal advisor can help make sure no law is disobeyed.
Hire a Collection Agency
Another alternative to consulting with a legal attorney can be hiring a collection agency. Just as there exist credible legal professionals, so do debt collectors. Consulting with a collection agency can serve as a great resource, especially when having to search for non-paying clients can be difficult. With a large information database available to them, collection agents can come into contact with any kind of client trying to hide from their late fees. Hiring a collection agency can serve as an appropriate middleman, especially when wanting to preserve a cordial and composed relationship with the customer in question.
There’s nothing more harmful to your business than an unpaid invoice. In these circumstances, it is important to consider these strategies in order to ensure your business prospers.