Most of the time, customers will pay. But sometimes, they will refuse – and they’ll often provide reasons for doing so.
For small companies run by entrepreneurs, this sort of thing can cause a lot of concern. You need incoming cash to pay your current bills and enable you to continue hiring staff. A single missed payment can sometimes mean the difference between survival and going under.
Let’s suppose that you don’t have any money-back guarantees and you haven’t broken your terms of service. What can you do to ensure you get paid?
Have A Conversation About The Problem
The first thing to do is to chat with your client about the problem. Sometimes they will refuse to pay you because of a mistake at their end. For instance, their record-keeping might show that you haven’t delivered a service, even when you have!
The next thing is to figure out whether you’ve reneged on your agreement in any way. You want to work out whether there are legitimate reasons your customer isn’t paying you. Sometimes, you’ll discover that your employees have done shoddy work and need to provide clients with something better.
After that, try to find out what they were expecting and compare it to reality. If they had wildly unrealistic ideas about the path forward, then correct them by pointing out how your industry operates.
Set Up A Payment Plan
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If finances are the issue, you may need to set up a payment plan. Other companies could be in the same position as you and not have sufficient cash on hand to meet their obligations. Setting up a payment plan allows organisations to break up their expenses across several months while paying you for the privilege.
Remember, sometimes you can sell your accounts receivable to factoring firms who pay you cash upfront. They then collect the bill from your clients on your behalf. It allows you to shed risk.
Create Legal Documents Insisting On Payment
Inevitably, some customers will refuse to pay for services rendered by your business. When this happens, you want a process in place that’s ready to go to ensure you get the money they owe you. Legal professionals, like Gorvins Solicitors, suggest getting assistance with this process. You want to ensure that all your contracts are airtight from a legal perspective so that you can seek restitution if and when something goes wrong.
Hire A Collection Agency
If customers still refuse to pay, then you’ll need to hire a collection agency to enforce the contract that you have with them. These organisations have the legal authority to recover your costs from other companies when payments are more than 90 days late.
What’s nice about these services is that they take the task of collecting payments off your hands. You just pay a fee, and the agency will get on with the job for you. Mostly, they are able to resolve disputes amicably. And sometimes they will even recover costs from the other side, making it a win-win situation.