Every business owner deserves payment for the goods and services that they provide. Businesses are not charities, and there is no reasonable expectation that you will do work for free.
Having collection systems in place from the beginning of your business, and triggering them when payments are late, can help you collect unpaid invoices.
What systems can you implement to collect unpaid bills?
Your client may not be deliberately cheating you just because bills are not paid promptly. Invoices go unpaid for many reasons. Clients may misplace bills or the person in charge may be juggling too many responsibilities. It is a good idea to begin with gentle reminders that become more forceful as necessary. Here are four steps that comprise a solid collection plan:
- Send a written reminder as soon as your client misses the due date
- Send a collection notice promising further action if the debt is not paid
- Make personal contact, by phone or meeting, to request payment
- Send a final demand notice
Are there tips and tricks for executing a collection plan?
How you execute your collection plan can be as important as the collection plan itself. Some tips:
- Be persistent
- Follow up promptly
- Be polite and professional at all times
- Discontinue work or services until you receive payment
What do you do if you followed your plan but still are not paid?
If after diligent collection attempts your client still has not paid their bill, you may have to take legal steps to procure payment.
Having a plan to follow for late payments and missed deadlines can help you encourage clients to pay you without legal escalations.