Whether you run a small or big business in Dunedin, every organization needs its clients to pay on time for better operations. Non-payment can lead to various problems. It can be pretty frustrating when you have been sending your clients invoices and several reminders, and they do not make the payment. Non-payment is sometimes an honest mistake, but not always.
If you are stuck with non-paying clients, you might be confused about your next step. The good news is that you have several options. The best thing you can do is speak to a Dunedin business attorney to guide you through the process. This will prevent you from breaking any laws and getting into legal trouble for using illegal methods of asking for payment.
Tricks and tips to handle non-paying clients
Research about the client.
It can be tempting to accept any client that comes to your office doors and agree to work for them. After all, you are running a business and could use the money they pay you. However, it helps to research the client before you agree to work with them. See if the client has a reputation in the market for paying on time.
Good companies usually refuse to work for someone with a bad reputation. If a prospective client has a bad reputation, you might want to avoid them.
Sometimes a client may refuse to pay because they do not have any money to pay you. They may be going through a financially rough time and be unable to afford to pay you. If that is the case, you may want to talk to them. Tell them that delaying payments is not helping the situation and that you want to offer them a different payment plan.
For example, you may allow them to make the payments in installments instead of paying a huge amount altogether. This will lessen their burden and ensure you receive payment too.
Have a contract in place.
Keep in mind, this is not only about your client. Whether it be your best friend, sibling, or neighbor, you must always have a written contract. The contract must outline the following details:
- Payment schedules. For example, 50% deposit and 50% upon completion.
- Terms of payment. For example, payment should be made within 30 days of sending the invoice.
- Payment method.
- Late payment policy. For example, if the amount in the invoice is not paid on time, impose a late fee.