How To Deal With Late Payers As A Small Business
Late payments or even non-payers are all too familiar in business. If you operate on an invoice payment scheme, there is always the possibility that the client won’t settle what they owe, and you are left out of pocket. The lockdown measures seem to adversely impact this problem as many businesses were forced to close and unable to trade, meaning they couldn’t pay what they owed.
Sadly, this is all too prevalent, and their impact on non-payers can be costly. But if you face this situation for the first time or want to know how best to handle non-payers in the future, this post looks at your options should you find yourself in this situation and how to avoid it altogether.
Research Your Client
Before agreeing to collaborate with someone, conduct a background investigation on that person. Do they have a good reputation in the community for paying on time, or do other small businesses refuse to do business with them because of the person’s inability to pay up on time? If the prospective client has a terrible reputation in the community, you may want to avoid doing business with them altogether.
Sign A Contract
Before any work commences, sign a contract, so both parties know what is expected upfront. This way, you will have more legal rights if they fail to pay as they were completely aware of their responsibilities for settling their debts.
Stop The Work
This isn’t always possible, but if you have an ongoing contract to continuously supply work and haven’t paid as expected, stopping work can be all it takes to jolt them into settling their overdue payments. The last thing you want is to continue to waste money by completing your end of the bargain when you won’t be paid for the work.
Try All Contact Methods
As a result, your contact person isn’t returning your calls or emails. Contacting someone else within the organization may be a good idea. Take note of the company’s email address or phone number, which may be found on the company’s website, LinkedIn account, or social media profile. If you are having trouble sending online messages, give them a call. If that doesn’t work, and the client happens to be in the same city as you, pay a visit to the client’s place of business. A personal visit may not be necessary for a small invoice that has gone unpaid, but it may be required if the client owes you hundreds of dollars and has been months late.
Seek Legal Advice
Many small businesses are hesitant to take legal action because it is expensive, time-consuming, and can be nerve-wracking at the best of times. However, if there is a small company lawyer such as a cannabis collection agency in your area who offers reasonable fees for delivering letters to customers who have not paid their invoices, you should contact that lawyer. Sometimes the mere prospect of legal action is enough to motivate individuals to open their wallets and spend their money.
Additionally, you can inform the client that you will be claiming in small claims court. Your state will have unique laws about the amount of money that the client must owe for you to be eligible to take the case to court.