Your small business has the right to go after customers who have not paid their bills. While no business can afford to lose money, small businesses have an even smaller margin for error when it comes to maintaining their cash flow. Therefore, it is important for the owners of these businesses to understand what their options are to recover these funds should they not be able to prevent late payments.
1) Enlist The Help Of A Debt Collection Agency
Although going this route will cost your company money, a debt collection agency will not drop the matter until the debt has been paid. The one downside to this plan is that you may not get 100 percent of the balance owed. This is because collection agencies may settle for a percentage of the outstanding balance. However, getting some of your money is better than getting nothing at all.
2) Get Your Lawyer Involved
Using a debt collection lawyer can be an easy way to ensure enforcement of judgement and get your money in a timely manner. Going to court to collect your debt can help you get the entire balance that you are owed. Once you get a judgement against the party that owes you money, you can take steps such as wage garnishing to get your money. Your company may also be able to take the cash directly out of the bank account of the individual who owes you money. The good news is that your business may not need to pay attorney fees until the case has been resolved.
3) Withhold Future Services
If your company is in the middle of a project with a client, it may be prudent to withhold services until payment is received. Although this may not work with all clients, it should convince the vast majority of them to pay up. There is a good chance that your client is also a business owner who is going to lose more money losing your services as opposed to paying your company what it is owed. If you still don’t receive payment, there are still the two options above to resort to in an effort to collect the balance owed to your business.
Small businesses cannot afford to provide services without being paid for them. If your company is having trouble collecting on a debt, you should know where you can go for help. Call a debt collection agency, get your lawyer involved or simply stop providing services. At least one of those options should help your business get the money it has earned.
