Sooner or later, you are going to have a client who doesn’t pay you for services or products provided. Customers who do not pay are a fact of life for every business, so what are your alternatives? Here are some options:
In-house collections – Designate someone in your firm to contact the buyer personally to see if the invoice was lost or if there were other reasons for nonpayment that you can work out.
Attorney – A Creative Business Lawyer™ can help you collect if your own efforts have failed. Sometimes all it takes is a stern letter on attorney letterhead to get action.
Collection agency – You won’t get the full amount – a collection agency generally takes 25-40% of a collection – but sometimes something is better than nothing.
Small claims court – You can file a claim in small claims court if the amount due is within the limits for courts in your area. This will take more of your time than money, but could pay off.
Tax write-off – You may be able to take a bad business debt deduction if all your collection efforts have failed.
If you find yourself getting stuck with accounts receivable on a regular basis, you very likely need to review your invoicing practices. We can help you with that.
There are also new technologies that allow you to get paid on the spot, on your smart phone or tablet device.
If you are still sending out paper invoices, consider changing to electronic invoicing and be proactive about following up once a payment is even one day late.
We proactively monitor and review these kinds of matters for our clients. Let us know if we can do so for you.
A comprehensive asset protection plan for both your business and personal assets is a must for any business owner. If you’re a small or mid-size business owner, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit and we’ll consider the best asset protection strategies for you and your business.