Debt Collection – What to Do When Your Customers Don’t Pay
Owning a business comes with plenty of challenges, many of which aren’t always foreseen. One such challenge, and one of the most stressful situations you’ll go through as a business owner, is when your customers don’t pay their bills. Wherever possible the following steps will either prevent or limit your exposure to customers not paying their bills:
Have A Written Contract or Agreement
One of the most important things that you can do to ensure the terms of service are formally agreed, is to have a contract or written agreement signed by both parties. By having such a document, you and your customer have agreed on the terms including when payment should occur and if there are any part payments or payments in advance. A written contract also gives you a clearer path to pursue recovery through available processes if you are not paid when agreed.
Many services can be provided over a period of time and may require a considerable up front cost to your business. To assist with the cashflow of the business and to reduce the exposure to non-payment, agreeing to progressive payment for goods and/or services will help. Non-payment of earlier invoices in such circumstances will allow you to stop providing the remaining good or services thereby limiting your exposure until the customer makes payment.
Despite taking such measures, there is always the chance your customer does not pay for whatever reason. When this occurs, there are a few things that you can do to remedy the situation. One of the most critical aspects to recovering money owed to you, is to act quickly. The longer money goes unpaid, the task of recovery can become more difficult.
Contact Your Customer
Contacting your customer and discussing the overdue payment is very important. Don’t be put off talking about money, you are entitled to payment if you have provided the goods or services agreed. Always be polite and seek to understand why payment has not occurred and if there is a way that payment can be made immediately.
If repeated attempts to contact the customer does not result in payment, engaging a reputable debt collection agency within a reasonable period from the time that the money becomes overdue increases the likelihood of of the debt collection agency being able to assist in facilitating speedy payment. Collection agencies will establish contact with your customer in a formal manner and in compliance with industry guidelines to determine the reason for non-payment and to arrange the earliest possible payment of moneys owing.
If the debt collection agency exhausts avenues to payment of monies owed, then using the services of a legal practitioner may be your only option. Don’t be put off by the potential cost as courts can award a portion of the legal costs to be paid by the customer if the action is successful.
Do you have clients that owe you money? Are you wondering how you can get the money back? It can be quite a struggle which is why we created this guide for you. If you want to solve your debt collection problem that you are not having success with, then don’t delay, engage a debt collection agency now to get the help you need.