When doing business with clients, you expect proper payment for your products, services, and labor. However, what do you do if payments are late, or, worse, don’t come through at all? Regardless of why you haven’t received payments, unpaid invoices could put a dent in your business’ finances. If you have taken the necessary precautions but your client still doesn’t pay up, you have to act fast. Here’s what you should do:
Evaluate Your Options
Is chasing the payment worth it in the grand scheme of things? For instance, if the unpaid invoice is equivalent to just a small percentage of your business’ annual income, it might be better to let it go and don’t do business with that client in the future. Otherwise, you might end up wasting more energy and money than you have bargained for.
Follow Up with the Non-paying Client
It’s a good idea to contact the client if you don’t receive a payment by the due date. Don’t assume the worst of your client. There’s always the chance that the client has misplaced or lost the invoice. Perhaps your client had a medical or family emergency or was vacationing. Send your client a firm yet cordial email to remind that the invoice wasn’t paid on the due date and that you’re opening to resolving the issue. It’s also a good idea to ask if the client has any concerns about the service or product that you have delivered or if you can assist in the payment process.
Get Professional Help
If your client is ignoring or resisting your requests, consult your business attorney in Indianapolis to find out which legal actions are available to you. Lots of individuals and business don’t really know about the legal complications involved in collecting debts. If your attorney contacts your client, chances are that the threat of legal action is enough to make them pay up. But you should be very careful to avoid overstepping the rules under the Fair Debt Collection Practices Act (FDCPA).
Hire Someone to Do the Collection for You
You can hire a professional debt collection agency to do all the hard work for you. Ask around for references or look online. Make sure to read reviews and testimonials to gauge the reputation of the agency. If this doesn’t work for you, you can also check out collection agencies certified by the Better Business Bureau (BBB) or members of the Commercial Collection Agency Association (CCAA).
If you don’t want the hassle of running after unpaid invoices, there are some basic things that you can do to prevent it from happening in the first place. For starters, make sure to research all new clients before doing business with them. Make sure that they sign the necessary contracts and request for payments upfront. Likewise, ensure that you have a clear and convenient payment process in place to foster strong business relationships. Lastly, know when you should stop wasting your time and resources. Think about this: It is not worth your money, energy, and time to chase after a $250 invoice, right?