How to Make Sure You Get Paid for Your Small Business Services

Hi there! Today, I want to share with you some important steps you can take to make sure you collect payment for the services you provide as a small business owner. It can be frustrating when clients don’t pay on time, but by following these six steps, you can increase your chances of getting paid promptly and in full.

Step 1: Establish Clear Payment Terms

First things first, it’s crucial to set clear expectations with your clients from the beginning. Make sure to outline your payment terms and conditions in a simple, easy-to-understand contract. This will help both parties understand their responsibilities and ensure that everyone is on the same page.

Step 2: Send Timely Invoices

Once you’ve completed your work or delivered your product, don’t wait to send out your invoice. The sooner you bill your client, the sooner you can expect payment. Be sure to include all relevant details, such as the services provided, due date, and payment methods accepted.

Step 3: Follow Up with a Friendly Reminder

If your payment deadline has come and gone without receiving payment, don’t panic just yet. Sometimes, people simply forget. Send a polite and friendly reminder to your client, reminding them of the outstanding payment and requesting their prompt attention to the matter.

Step 4: Make a Phone Call

If your follow-up email doesn’t yield results, it’s time to pick up the phone. A personal call can often be more effective than written communication. Politely inquire about the status of the payment and offer any assistance or clarification they may need to settle the debt. Remember to document the call for future reference.

Step 5: Consider Negotiating a Payment Plan

If your client is genuinely struggling to pay in full, be open to discussing a payment plan. It’s better to receive partial payment than none at all. Work together to establish a feasible arrangement that allows the client to pay off their debt in manageable installments. Make sure to put the terms of the agreement in writing to avoid any misunderstandings.

Step 6: Enlist Professional Help if Necessary

Finally, if all else fails, you may need to seek assistance from a collections agency or hire a lawyer to help you recover the debt. While this step should be a last resort, sometimes it’s necessary to take legal action to protect your business’s financial well-being.

By following these six steps, I hope you feel empowered and equipped to handle small business debt collection. Remember, clear communication, timely invoicing, and persistence are key to ensuring you get paid for the valuable services you provide. Good luck!

There’s nothing more frustrating than dealing with a client who won’t pay for the products or services I provided. It can be tempting to go over to their place with a bag of pennies, but it’s better to handle it legally and carefully.

Understanding Small Business Debt Collection

Every company will come across a situation where a client doesn’t pay on time, refuses to pay at all, or can’t afford to pay the full amount for the services I provided. Each of these situations is really frustrating, but it’s important for me to respond in the right way. How I respond not only affects my chances of getting paid, but also how people see my brand.

• Customers who will do anything to avoid paying.
• If you’re someone who owes a lot of money and pays it off sporadically.
• If you’re someone who generally pays on time, but can’t because of money problems.

Generally, you want to make sure that your clients and customers fit into the last two groups, FindLaw.com explains. You can handle and work with those who fall into the last two groups because they have a history of making full or partial payments. However, as a small business owner, you need to come up with a plan and method to determine which clients and customers fall into the first group.

I want to talk to you about debts and payments because it’s important to understand that not all debts are the same. Let me explain with an example. Imagine you have a long-time client who has always paid you on time, and they owe you $250. Now compare that to a brand new client who hasn’t paid you anything yet and owes you $15,000. See the difference? It’s clear that you can’t handle every debt collection situation in the same way. You need to be adaptable and consider the circumstances of each case.

Here are 6 tips to help you get your clients to pay up:

It doesn’t matter if you have a personal relationship with the client or if you’re frustrated with them as a new client – you have the right to collect the money you’re owed. The key here is to be smart and strategic in how you handle these situations.

1. Stay Calm

When you’ve done work for a client and they don’t pay you when they’re supposed to, it’s normal to feel really mad (and you totally have a right to be angry). But it’s super important to try to stay calm and take a deep breath. If you get even more furious, it’s less likely that you’ll get all of the money you’re owed. The client will feel attacked, will take it personally, and won’t want to cooperate (at least not right away).

2. Understand Your Rights

If you don’t have any professional training in accounts receivable or debt collection, you might be struggling to figure out how to collect payments. It’s important to learn about your rights and legal options as soon as possible. By doing this, you’ll not only know what actions you can and cannot take, but you’ll also feel more confident when dealing with customers.

For instance, did you know that you have the right to legally search for someone’s social security number if they’re avoiding paying their debts? Although there isn’t a free online service to do this, you can follow the proper legal procedures to obtain someone’s social security number and move the process forward.

3. Keep a Record of Everything

When it comes to dealing with unpaid debts in a small business, documentation is crucial. If the situation ever escalates to a legal battle, having proper documentation can make a big difference.

Every time you have a conversation with a client on the phone, remember to record the call and jot down notes. Make sure to keep copies of all letters you send through the mail. Save any important emails related to the debt. Also, keep a log of any visits you make to the client’s office or home. All of this information may come in handy down the line.

4. Be Respectful

Harassing a customer who owes you money is not helpful. While being persistent is necessary when collecting a debt, there’s a fine line between checking in and becoming a nuisance.

When someone harasses you, it means they keep bothering you every single day for many days in a row, and they yell at you. It’s really unpleasant. On the other hand, being persistent means that you keep trying to contact the person every week or so, and you give them some options for how they can start paying back the money they owe.

5. Make a Lower Settlement Offer

Imagine someone owes you $10,000 and they’re already 120 days late in paying you. You’ve been trying to get the money from them for four months and you’re starting to think you’ll never see it. Instead of just giving up and forgetting about it, it’s a good idea to suggest that they pay you back a smaller amount than what they owe.

6. Why You Should Consider Hiring a Collection Agency

If you’re dealing with a lot of unpaid debts and spending precious time trying to collect the money, it might be a good idea to hire a collection agency. Not only will this save you time and potentially get you better results, but it can also keep you out of legal trouble.

The Fair Debt Collection Practices Act (FDCPA) was established in 1977 to govern the process of collecting debts, explains Mike Periu, the president of Proximo, LLC. This law specifically regulates companies that collect debts for clients or purchase debts at a discounted rate with the intention of collecting on them.

Registered debt collection agencies are well-versed in the intricacies of the FDCPA, and by working with them, you can avoid finding yourself in a difficult situation.

Understanding the Fine Line to Walk