How Do I Press The Issue When A Client Or Customer Owes Me Money?
In most cases, your clients and customers will pay you in good time; they may ask to wait a day or two for a check to clear, or something similar, but they will pay you.
Unfortunately, other customers may seem to give you the runaround.
Nobody likes spending money, but you expect payment for your goods and services; and legally, they have to pay you.
Thankfully, a client holding out on payment does not mean that everything is over, and you will not collect your money. Many methods are available to you, varying on how severe your customer’s withholding is.
Here are some of the best methods you can use to get your payment from a problematic customer:
Make Your Expectations Clear
The best way to get your money is to clarify everything as much as possible in advance.
By laying a good foundation, you increase the likelihood of your client paying the agreed-upon amount of money at the agreed-upon time.
Before doing any work for a client or a customer, consider documenting your transaction with a service agreement signed by you and your customer.
This service agreement will also be very useful in scenarios where your customer will outright refuse to make payment, but there will be more on that later.
Make A Schedule
A payment schedule written into the service agreement may be vital to your business’s operations on larger projects.
For contractors, a payment schedule can ensure a steady flow of payment for the duration of the project; otherwise, a clear payment date helps to build your case and increase the odds of payment.
Make A Call
One of the first and easiest things you can do to ensure payment is to call your client. Interaction with another person helps put subtle pressure on the client, and when called, most customers will at least agree to set out a payment plan.
If a call does not work, try setting up an in-person appointment. While keeping the customer comfortable, an in-person meeting helps to exude even more pressure on the client.
Send A Formal Debt Collection Letter
A formal debt collection letter is a formalized reminder, containing all relevant info on the payment, including the due date, an acceptable window of receipt, and what methods of payment to use.
A formal debt collection should also lightly detail the following steps if you do not receive payment, without outright threatening legal action or use of a collection agency.
Send A Final Demand Letter
A final demand letter is what you use when all methods have failed; it is a final chance for the customer to pay before you file a lawsuit.
Many companies opt to hire an attorney to write their demand letters to keep the letter legally airtight. As these letters come from an attorney, a client may feel that it carries more weight and finally pay you.
Nobody wants to entrench themselves in a lawsuit, but unfortunately, some companies may have no further options.
If a significant amount of money is on the line, you may sue your client; although lawsuits may take an extended period, so you must consider the value of the money versus the value of a lawsuit.