Getting Paid Without Having To Take Out Anybody’s Knee Caps

06 May Getting Paid Without Having To Take Out Anybody’s Knee Caps

Running a business and making money is difficult enough.  Doing all this work to not get paid is extremely frustrating.  If you are in an industry where you are not guaranteed payment at the time your goods or services are delivered here are some important steps to take note of.

• • Be sure you get accurate contact information and whenever possible collect a credit application. Important information to be collected would include physical address, telephone number, full and accurate name and a personal guarantee.

• • Do not extend more credit to your customers than you yourself can afford.  Understand how much you can afford to loose out on in a worst case scenario if you didn’t get paid.

• • Note your finance charge policy on your invoices.

• • Make sure you remittance information and address is clear and easily found.  Self address return envelopes, phone numbers listed on the statements and invoices and emails addresses for your receivables contact are all needed by your customers.  If they can’t contact you with a question about a bill their remittance time will slow. If you are a QuickBooks user then you should customize the templates to best present your business.

• • Bill regularly.  Those that aren’t going to pay will be revealed over a $200 bill rather than a $2000 bill.

• • Review your receivables often. Without reviewing this often you will not know how much credit you have extended, who is paying and who isn’t.  Shutting down the ability to charge at the first sign of trouble can save your company thousands if not more.

• • Set up a collection practice before you have a problem.  It should include at which point a phone call is made regarding past due balances, when a series of letters should begin, what those letters should say, at which point an items is referred to collections, and if you have legal rights to reposes when you will do that.

• • Make sure your collections practices are legitimate and do not violate the Fair Debt Collections Practices Act.

• • Get a credit card on file.  When someone fails to pay their bill you can charge the balance owed.  Make sure you have a written agreement that allows for that so you don’t end up with a charge back.