The success of your business depends upon both your company and your clients fulfilling your obligations to each other. While you can do your best to carefully screen clients to make sure that you only work with reputable people or companies, there are times when even that isn’t enough.
There are many reasons why a client might not pay their bills on time, and knowing how to handle it protects your company’s bottom line.
The ideal way to handle late payments is to avoid having the problem in the first place. If your clients tend to pay late regularly, then it might be time to add some new policies to your business plan.
People who chronically pay late may have simply forgotten or gotten in a temporary bind. They may also think that you are just too nice or too small of a business to take the issue any further.
Once someone is well past paying on time, you need to consider the risk of doing any further business with them. You may choose to suspend any ongoing services that they may need.
After using softer methods, you may need to take your payment enforcement methods to the next level. Telling your clients that they could face legal consequences for not paying their debt could help them see the benefit of meeting their obligation for making a payment.
Debt collection services, like those offered by Leib Solutions, can also help with this part of the process. They can help pursue the collection of fees and can ensure that any communication that you have with a client is done legally and respectfully. If issues persist, they can give you advice for your next steps.
No one wants to have to take a client to a court or cut off services. However, there may be times that you have to do just that to protect your business and income. When it gets tough, letting the professionals handle it helps you to focus on doing what you do best.
Incentivize Paying on Time With Late Fees
The ideal way to handle late payments is to avoid having the problem in the first place. If your clients tend to pay late regularly, then it might be time to add some new policies to your business plan.
Late fees help to encourage people to pay on time so that they don’t have negative impacts on their budget. Depending upon the severity of the problem, you can offer a warning first before late fees kick in.
Send Out Soft Calls and Reminder Letters
People who chronically pay late may have simply forgotten or gotten in a temporary bind. They may also think that you are just too nice or too small of a business to take the issue any further.
There are services that can help you to send out reminder letters to your clients that let them know that you have the time and ability to make sure they pay their debt.
This is often the gentler way to begin working with clients who are late without losing their business.
Stop Providing Services
Once someone is well past paying on time, you need to consider the risk of doing any further business with them. You may choose to suspend any ongoing services that they may need.
You can also refuse to work with them on any further projects until they are paid up. This type of information can be included in the reminder letter to make sure that they understand why you are suspending their services.
Pursue Legal Action
After using softer methods, you may need to take your payment enforcement methods to the next level. Telling your clients that they could face legal consequences for not paying their debt could help them see the benefit of meeting their obligation for making a payment.
Debt collection services, like those offered by Leib Solutions, can also help with this part of the process. They can help pursue the collection of fees and can ensure that any communication that you have with a client is done legally and respectfully. If issues persist, they can give you advice for your next steps.
No one wants to have to take a client to a court or cut off services. However, there may be times that you have to do just that to protect your business and income. When it gets tough, letting the professionals handle it helps you to focus on doing what you do best.
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