Whether your business is large or small, you are going to encounter customers and clients who do not pay what they owe you. This is often a main contributing factor to why so many businesses fail within their first two years of operation. Thus, it is important that business owners understand that no matter how much business a client brings you, they are not a good client if they are not paying you.
It is true there are exigent circumstances that sometimes prevent a customer from paying you, but the majority of the time it is being done on purpose. Thus, when you first start your business, you may want to find creative ways to provide yourself more financial protection than simply ‘trusting’ that payment will be made.
Depending on the type of business you run, it may or may not be possible to use these tactics. However, if you are able to do so, consider:
- Requiring upfront payment. This can be especially important when you are providing a service.
- Requiring a partial payment upfront. Once a customer has invested into your service, the client is more likely to complete payment.
- Create a payment schedule that requires a one-third payment upfront, another third at the halfway point of the project, and the remaining third when the project is completed.
Regardless of what you decide, stick with it! Inform the client of the payment plan from the beginning. Chances are once the project has started and they have already paid money, they will continue to pay to get the project completed.
The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation in all collection matters. We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases. If you need assistance with your collection matters, please contact us at (480) 584-5660.