The responsibility of business ownership is high. Necessary outgoing expenses include payroll, utilities, taxes, rent, etc. For those things to happen, business owners rely on incoming cash. What happens when invoices are unpaid, or you are left with a delinquent account? This is something that businesses deal with on a regular basis. Luckily, there are preventative measures you can take to reduce the frequency with which this occurs.
How to avoid non-payments
One of the easiest things you can do is research a vendor or client before agreeing to working together. The internet is a great place to start your search for any red flags. If your research gives you the confidence that this entity will uphold their promises, engage in a legally binding contract that specifies every detail of the financial arrangement.
Collecting past due payments
Unfortunately, every company is in the business of debt collection. If you have a past due invoice or an otherwise delinquent account, you have several options and you may need to employ all of them.
- First, pick up the phone and make a call to the delinquent party. As a business person, you understand the impact of a phone call. Explain the situation, provide a plan you are comfortable with and document the call by sending a summary email.
- If your previous attempts are fruitless, you may choose to hire a collection agency trained in handling situations like this. The fact that you have escalated the past due payment will be a sign that you are serious.
- If you feel it’s appropriate, consulting an attorney may be your next best move.
While some people say that non-payments are a sad reality of doing business, it doesn’t have to be that way. If you have engaged in a legally binding contract with someone who has failed to hold up their end of the arrangement, you may benefit from a course of legal action.