If a client indicates they won’t pay the bill, what actions can be employed?

  1. The most efficient way to begin a formal approach to collections is to have your lawyer send a 10-day demand letter. Most attorneys have a standard template for such correspondences and they are much more effective than any letter generated from your business on your letterhead. The demand letter contains exactly how much is due, the amount of penalty interest that is now owed, and states that if payment is not received within 10 days, legal action will be taken.
  2. Take the non-paying person or organization to small claims court in the jurisdiction in which they reside. Have a court official – preferably a state trooper or county sheriff – deliver the serve process documents to get the debtor’s attention.
  3. Seek the assistance of a professional collections agency. These agencies know the tricks of the trade because that is their specialty. There are specific rules, regulations, laws, and procedures surrounding the permissible methods of contacting a debtor to collect on a past-due balance. They also have the added benefit of knowing how to leverage the customer’s credit rating as a collection tool. A collection agency stays up to date on consumer rights laws to keep them and you out of trouble while achieving the desired results.
  4. Know when to cut your losses and call it quits. Every tip offered heretofore involves an investment of time and effort. Your time is as valuable as the money you are owed. Be realistic and use common sense in pursuing more formal means of getting paid versus the expenditures of your available resources. You may decide to write off the bad debt to the extent the Internal Revenue Service allows.

-Vince DiCecco, Your Personal Business Trainer

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Vince DiCecco

Your Personal Business Trainer

Vince is a dynamic seminar speaker and author with a unique perspective on business development and management subjects, primarily in the decorated- and promotional-apparel industries. With 20+ years of experience in sales, marketing and training, he is an independent consultant to businesses looking to profit and sharpen their competitive edge.

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