Ethiopian Review

Economic Hardships Are No Reason for Your Business Not to Be Paid
One of the many problems small business owners are facing right now is those consumers who slow down their bills payments. They do this because slowing payments down can help them stretch their budget. Although there are a great number of people doing this to small businesses, it doesn’t
mean your business should just accept slow payments and hope that the economy turns around soon.

Here are a few steps you can take to help you get your customers to pay on time.

Always do a credit check.

As the saying goes, ‘an ounce of prevention is worth a pound of cure’. The best way you can avoid late payments is by credit checks on your new clients. As a business owner, you have the right to run a credit check on them; this way you can be sure that they have no previous records of bad credit and that they have settled most of their outstanding credit payments. Also, be clear about your prices, service charges and taxes with all your customers; hiding fees and other charges will not help you in your business.

Also, if your business provides uses a contract when providing services, make sure that it clearly defines which services you are charging for, which goods the customers pay for and what other services additional charges require additional charges include your billing schedules in your contract as well. When dealing with a contract, make sure that everything you and your client has agreed upon is in writing; and make sure that there are no loopholes in the contract. It would be good to have your company lawyer create an agreement for you and your client.

Stay On Top Of Billing Chores.

To avoid having billing disputes with your customers, regularly send out your bills to them. Follow a strict schedule and make sure that each client receives their bill. This is important because some clients often make excuses related to the billing statements. Make sure these billing statements are easily identifiable from the rest. Stamp the envelope “Invoice Enclosed” so it doesn’t get thrown out with the junk mail.

If your client ignores your billing statements and reminders here’s what you should do.

First, keep in mind that the longer a bill is left unpaid, the less likely they are going to get settled. To these kinds of losses, send out notices to clients who don’t pay within the scheduled time frame.

If, after persistent reminders, they still don’t pay, get someone to personally contact your client and find out their reasons for not paying. Oftentimes, these clients will cooperate and will explain why there are not paying their bills on time. If your client is having a financial
problem it would be good to offer installment options. This will take longer, but it will get you all of your money.

If all those actions have no results, try using more aggressive methods in collecting payments:

File suit in small claims court. You won’t have to spend much on this option; you won’t even have to hire an attorney. All you need to do is to sue in small claims court and they will help you in collecting your payments.

Hire a collection agency. This is a little bit expensive, as collection agencies will charge for its services. This is an effective and hassle free way of collecting payments from your client. Once you have hired them, have them report the debtor to credit reporting agencies.

If you are dealing with a large debt, then you can acquire the services of an attorney. This is true only is if the amount is large enough to enough cover an attorney’s fees and attention.

Here are the things you should avoid.

Do not talk about your clients behind their back. It is both cheap and tactless; be professional with all your business dealings even if they’re not doing well. Don’t spread rumors and malicious information about them in the internet, even if it’s based on fact. Do not threaten or try to scare your client. These actions will get you sued.

Remember: in anything you do, always be professional.

(by Richard Smith | AC)