Nobody needs to be reminded how tough these economic times are. One of the keys of surviving and thriving in this economy is keeping accounts receivable in check. In collecting outstanding accounts receivable, a balance must be struck between forcefulness in collecting the debt and good customer relations to keep a client. When balancing the payment versus the possibility of future work, consider the following tips:
1. Create a collection plan. Do not feel any remorse in preparing a plan of attack to collect debts. Remember, you did the work, created the product or addressed an urgent client need that the client agreed to pay for and, for some reason, has declined to pay. Make a plan of attack, put the plan in writing, and share it with everyone in the office who is part of the collections team.
2. Make the call. Sometimes, the hardest part of collections is starting. Go to the client’s office, pick up the phone and call or send an email asking about an outstanding bill. When communicating, be assertive, polite, tactful, confident, and goal-oriented to get paid. Make it a priority to call, collect, and follow up on a bill.
3. Prepare to compromise. Like all business dealings, it’s important for you to strike a balance between assertiveness and good customer relations. Taking something as opposed to nothing is better in the long run for your sanity and your bottom line. Think of alternatives to cash – such as bartering services, referrals or taking a promissory note with a personal guarantee if the client has the desire to pay but has lost the ability to do so. You want to avoid alienating any of your customers because you never know when you might do business with them again and word-of-mouth never stops. And, you can be flexible and firm at the same time. On the other hand, this is business and if customers can’t fulfill their obligations, then you need to take the necessary steps to get what you need.
4. Consult with your attorney. If your soon-to-be former client does not take your call and does not respond to an email, letter or other forms of communication, that client is not likely to pay. Step one is to consult with your attorney to see if the client, company or individual is financially viable to collect. The last thing you want to do is spend money filing a lawsuit or hiring a collections agency only to find out that the former client is uncollectable. Step two is asking your attorney how expensive it will be to secure a judgment, and step three is asking how much time of yours it will take to pursue litigation. If you do not have a contract that includes the payment of attorney fees by the former client, you may end up owing more money in legal fees then what you could recover at the end of the day. Weigh your options before filing suit. Do not make a decision based on hurt feelings; make sure your desire to sue will be financially rewarding.
The attorneys of Dalton & Tomich, PLC have the experience and the knowledge to work with you to develop a legal solution that helps accomplish your goals. Our collaborative approach has helped leaders like you grow businesses and banks, develop and expand churches, and build nonprofit organizations nationwide.
In my role as Administrative Bishop for the Church of God, quite often we are faced with issues that involve local governments and municipalities. Many of these issues that arise in dealing with entities are land use related. I have found Dalton & Tomich’s experience and expertise in this area to be a valuable resource and asset in every situation.
Never one time during a year-long litigation process did Dalton & Tomich demonstrate anything other than Christ-like professionalism. They managed the legal details, while we continued to do church. How they managed themselves, managed our case, and represented our church set the table for me and our church to be where we are today.
Dalton & Tomich’s expertise and experience helped us through a very difficult legal journey, ultimately achieving a favorable outcome. Their personal interest in helping us went “above and beyond” just the call of duty.