Business owners depend on their clients paying their invoices in a timely manner. Business owners can be forced to delay new projects or worst when customers are slow to pay. But what can a business owner do when a client doesn’t respond to payment reminders, or simply refuses to pay?
STEPS TO COLLECT LATE INVOICES
As the business owner you must decide how important this debt is to you and how much your willing to spend to collect it. Obviously, it would be foolish to spend thousands of dollars to an attorney to collect an invoice that’s only several hundred dollars.
- First, resend your invoice with a polite message requesting prompt payment. As soon as an invoice becomes past due email a reminder. Make sure your email is being sent to right people.
- Call or visit your customer. If your emails are not getting results give your client a call. Be professional and polite to find out why your invoice has not been paid. Try to get payment by credit card. Usually, a call to the accounts payable department will answer all your questions.
- Stop Work. If you still have not been paid it’s time to stop working for the client. Let the client know you won’t provide any more work until your paid in full. If this action does not get you paid at least you’re not wasting any more of your resources on this dead-beat.
- Consider hiring a collection agency or attorney to help you collect. Collection agencies usually retain around 20%-35% of what they collect. If they are unsuccessful you don’t pay. Attorneys may require a retainer to take your case. If the invoice is for a significant amount of money this may be your best avenue.
- Take your client to Small Claims Court. Each state has specific limits on how much you can sue for. You don’t need a lawyer to represent you and if your client does not show up you win by default.
If you want to guarantee reliable cash flow and have professional help to avoid deadbeat customers call American Receivable. Our Top-Rated Factoring service steers our clients away from slow paying customers while our backroom constantly works to ensure timely payments. 1-800-297-6652
