Today we will provide you with essential tips to understand the “why” behind late payments and help you take steps towards achieving a resolution.
Late payments or non-payments are one of the core issues faced by businesses today. Any company expects a return for the effort, labor or service; it has provided to the client. Non-payments not only hurt the business motivation but also cause severe losses to the business.
Since payments are so essential for your business to manage utilities and other expenses, therefore, you can’t just sit back and wait for the clients to come and pay you. In this regard, what you can do? The blog answers the question. Keep reading to know more.
We will provide you with essential tips that you can follow to recover your late or non-payments.
Track Client’s Social Profile
Before signing a deal with your new prospect, it’s better to know your client a bit more. You can keep a check on a LinkedIn profile to track the work records and feedback.
Moreover, tracking your clients’ profile will help you get the core data, including your client’s email address and phone number. If you want to get more details about your client, then you can also search for his/her court records via Google.
Bind your Clients’ Legally
Binding your clients legally is the best way to save yourself from all the potential risks. Always make things clear with a legal contract. It will help both the client and the company. Plus, it explains core factors like payment terms and other legal affairs are also addressed.
Be careful while creating your legal contract. Don’t forget to add essential terms and conditions to prevent disputes. Always mention your payment schedule along with your chosen payment method. If you are not aware of how to create a legal contract, then you can take help from professionals. It will save you time and will make your processes easier and lawful.
Go for the Payment Upfront
If you want to get a hint about your client, then you can ask for the project upfront. Asking for the upfront will ensure you that you are paid plus, you can also compensate for the time and expenses which you are putting into the project.
One thing that you have to be careful about is asking for the market-competitive upfront. If you ask for a hefty amount, then chances are you will never going to be paid.
Ways to Follow Client that Doesn’t Pay
In the business world, everything is possible. Even after finishing every precautionary step, you still not get what you deserve. In this situation, you can follow a few steps to chase the client who hasn’t paid you.
Always get started with your opinion of whether the client is that important. If you find that you have been working on a massive project that took a big chunk of your time and resources and it’s worth it to chase the client then go for it.
Chasing small clients will only waste your money and time.
Send out Emails
The first step should be polite. You can start by sending out emails to interrogate about the unpaid bill of your service. Send the first email as a remainder of bill payment on the date that is mentioned in the legal contract.
Keep your email tone cordial to clear your payment during its initial phase. In addition, you may ask the client if he is fully satisfied with a product or service that you have provided.
Consult the Lawyer
In case, the customer is not responding to you in any way, and your invoice is worthy enough, then let the third party get involved. Don’t involve any friend in this case, always seek help from a professional and real advocate who will suggest the right legal ways to reach the client for payment recovery.
Before hiring a lawyer, write a demand letter. It is important because various businesses don’t realize the legitimate issues involved in the process. Therefore, hiring a legal professional will not only help you legally but also save you from various troubles.
Place a Discount on Quick Payment
This could be a fine way to receive your payment earlier without any potential argument. You can place an offer that says 5% discount for payment under 10 days.
It will not only encourage your client to pay earlier, but it will also nurture your relationship with the client you are working with. Instead of investing money into long legal processes, it great to give your clients a small discount and enhance your relationship for future work.
However, if you are still not getting paid, then you can follow other approaches. You can mention the discount offer on the invoice so that your customer may get enticed to pay you under 10 days.
Do Some Negotiations
If you don’t want to get into any legal action, then negotiation is the best way to follow. Keep in mind that negotiation is easier to accomplish. You can add a negotiation clause in your contract so that your client will not be able to decline that.
If you will add a mandatory arbitration clause in the contract then you and your client will have to be agreed with the arbitrator’s decision. In case, if you will select non-binding arbitration then you may move forward with some other specific legal actions.
Take the Client to Court
This must be your last action. When you are done with all the legal notices and negotiation then take your client to the court. In the USA, there are a few categories to select, depending on the money your debtor owns.
Small claims are in the range between $2,500 to $25,000. The court processes may take a little bit longer, but in the end, you will surely receive your money.
Identify your Clients Today!
If you want to run your business successfully then it is important to receive your money on time. Keep in mind that you should not sign every single deal. Always research your client and perform all the legal actions to make the process easier, safer and clever for your business.