Enabling you to succeed
You've probably been there. After completing an excellent job into which you have put all your effort, you wait in vain to get paid.
Yes, the client assures you, the check is in the mail. Or, at least, it will be tomorrow.
And still you wait.
You remind them the payment is now overdue.
And still you wait.
Indeed, dealing with delinquent accounts is a major problem for many small businesses.
You can take measures to recover your money, but they are often accompanied by additional costs and do not always work.
The best answer is to take steps in advance when you negotiate the deal to improve the chances that you will get paid rather than trying to chase the money afterward.
Much depends on the nature of your business, but here are some tips that you can adapt to enhance your chances.
At least that gives you some money should the client never pay in full. It also makes the amount that the client will owe at the end of the job a little less, increasing the chances that they will pay in full.
Determine the upfront deposit on the basis of your costs. If you have to buy equipment, parts or supplies, you want to make sure you get your money for those. Some contractors have the client pay directly for the parts.
Make sure you include a standard notice on all invoices or contracts that overdue accounts will accrue a 1.5 percent monthly service charge. You need to take this step in advance so the client is aware of the charge.
Offer a 5 percent discount (or a figure that works for your business) for payment on completion of the job. It is often worth it to earn a little less than to have to wait a long time for your money — or never receive it at all.
Make it clear you expect to be paid in that time frame.
If the company fails to pay on time, call and ask them when you can expect the check. If the company says, "The check is in the mail," ask them for the check number and when it was mailed.
Although this tactic may irritate some customers, it's unlikely to cost you the business.
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