Business CollectionBusiness Collection – Before you Hire a Lawyer

One of the most frustrating parts of owning your own business is getting paid. This is, unfortunately part of doing business for many businesses.  In a perfect world, we would be able to peer into a customer’s eyes and immediately see if he will timely pay or on the verge of financial disaster.  Though there are steps we can take to help on the front end, such as financial references and credit checks, the reality is there will always be situations where your customer is either unwilling or unable to make payment.

Inevitably, nearly all businesses will find themselves with an outstanding invoice.  Businesses should have an active system in place to identify those invoices as soon as they become late.  The faster you can identify and contact the customer, the more likely you are to be paid in full, and of course, maintain your necessary cash flow.  The first 90-days are critical in getting paid. To that end, payment reminders should be sent as soon as the late-paying customers are identified.  There is no reason to batch past-due notices and reminders to the end of the month.

The Phone Call

Quick, effective and cooperative communication with the customer is important.  A phone call followed by a polite letter can be very effective.  In your phone calls, even though you’re dealing with someone not paying, try to remember that you are still representing your business and its reputation in the community.  Avoid demeaning or using accusatory language in the call.  Instead, try a collaborative approach to see what options may be available to help your customer ‘do the right thing.’

The Letter

Your collection letters should be clear and concise.  They should clearly state the amount due, the accumulating interest, if any, and in a non-threatening manner the repercussions of not making payment arrangements in some specifically defined time.  And, of course, keep copies of these letters which may be needed should you be forced to file suit.

Of course, you may wish to have an attorney assist.  An attorney can assist at any point in this process, but additional fees will be incurred once that assistance is sought.  However, if your initial efforts do not yield results, an attorney can effectively and quickly seek recovery through moving the matter from letters and phone calls to filing a lawsuit seeking a judgment for the amount due and possibly the additional attorney’s fees and court costs. With a judgment in hand, the attorney can seek to garnish wages, bank accounts as well as other potential collection avenues to satisfy what amount owed.

Business Collection

If you’re business is faced with a non-paying customer, contact Jonathan S. Masters at Holcomb Law Group to discuss and assist in your collection efforts. 662.234.8775

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