Collecting Payments From Debtors
Aug 28 2019 0

Collecting Payments From Debtors

Any company that works with customers, by which I mean every company ever, has those customers that are routinely behind the ball when it comes to paying for the goods or services that they have received. Dissimilar from typical retail transactions like those that take place at a supermarket or a Wal-Mart, many business-to-business sales are not completed right away.

Therefore the customer isn’t always required to pay prior to the goods or services leaving the store or being performed. The terms of payment might be 45 days net or 90 days net, but the customer is given ample time to pay for whatever goods or services they have purchased.

 

But what do you do when those 45 days or 90 days go by without even a single payment? And what, if anything, are you able to do if that window of non-payment opens wider and wider and several months go by without any payment or word from your customer?

Collecting Payments From Debtors

Don’t Delay with Delinquent Customers

There are an endless number of excuses and reasons for nonpayments or delayed payments from your customers. If your invoices are delivered by post, it is possible that the invoice has not been delivered, or possibly it was misfiled or lost internally at the customer’s company. Based on the size of the company, it is also possible that no one is even aware that the bill has not yet been paid. Excuses and reasons aside, your company cannot continue to operate unless it is being paid.

One of the optimal ways of avoiding nonpayments or late payments is to be very upfront on the terms of the payment at the onset of the business association. Have a direct and straightforward approach on when the payments will be due and what could happen if the payments are late, like notification letters, reminders, and, if it goes that far, the deferral of future services or deliveries. 

Then, in the event that a payment is late, act swiftly to make sure that your customer recognizes that their payment is late and should be made as soon as possible. Since your business association with the customer is crucial, it is generally worth your while to explore ways that allow your customer to pay whatever he owes and keep on benefiting from your services or your goods.

 It is almost never in the best interest of either person to jump immediately to the suspension of services.

There Are Steps You Can Take if a Customer is Late With Payments

Your company’s well-being is largely dependent on it, so you absolutely must take getting paid seriously. You don’t want to lose out on business by being overly pushy or demanding, but you also cannot afford to lose out on business by being a pushover. Be dedicated to collecting what your company is owed. Do not get upset and never take the situation personally. You need and deserve your payment, but you also need and deserve to keep your customer’s business. 

Some ways of collecting monies owed include:

  •  Offering to put the customer on a payment plan: If a customer is very delinquent but is at least doing their best to make late payments, it is probably the most prudent for you to write up a plan that allows the client to pay the past due amount over time.
  • Threatening legal action: Have your business attorney write up a demand letter that offers a payment schedule. You must make it clear, however, that any deviation from this schedule that is not previously agreed upon will bring about some form of legal action.
  • Actually taking legal action: It is a fact of owning a business that from time to time you might actually have to file a lawsuit. You will need to carefully consider whether or not the amount that the customer owes you is worth the expense of filing and the probability of whether or not a judgment in your favor is actually going to get you a full recovery.

If you are having a hard time when it comes to collecting payments from your customers, the reputable corporate attorneys at Leiva Law Firm are here to help. If you have questions regarding problems dealing with debt collections then you need informed and accurate answers from an experienced California business attorney who will be able to apprise you of all of the legal options that are available to you. Schedule a free, no-obligation consultation today by contacting us at (818) 703-1777 as soon as possible. Our attorneys speak both English and Spanish.

 

 

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