If you've recently started your own business, you're probably looking forward to a long, successful run as a successful business owner. However, all businesses experience at least a few setbacks, and new businesses are the most vulnerable because they haven't yet established a solid financial foundation that can help them weather hard times. Many things can go wrong, from unexpected expenses due to building or equipment damage to customers that refuse to pay for goods or services. No business owner likes the idea of dealing with nonpaying customers, and fortunately, there are ways to minimize the chances that you'll have to deal with this situation.
1. Research New Customers
New business owners sometimes become so excited by big orders that they overlook the possibility that the customer may not be on the up-and-up. Before you deal with a new customer you've never heard of before, check to see if there are any complaints about them with The Better Business Bureau. You should also Google their name to see what comes up, and if they're a business owner, check to see what the online reviews say about them — if they've got a history of nonpayment, it'll probably show up somewhere online, whether through consistently bad reviews or court-ordered liens against their property.
2. Have a Clear Contract in Place
You should always have a clear contract in place for customers who aren't paying in full for all services rendered or goods purchased. This provides business owners with significant leverages in the even that it's necessary to take matters to the courts. A written contract should spell out the terms of the sale in a clear and concise manner. Having a highly visible late payment policy in place is an important part of this type of contract.
3. Consider Using an Accounts Receivable Management Service
Chasing nonpaying customers can eat up a significant amount of valuable time and energy, often resulting in other aspects of the business suffering. Using an accounts receivable manageable service ensures that you won't be tied up this way, and it also means that collections will be handled in a progressional manner, which all but eliminates the possibility that your collections attempts will be against the regulations outlined in the Fair Debt Collections Practices Act. These services may also provide checking customers for creditworthiness and provide you with reports detailing how much credit you can afford to extend to customers without creating undue risk for your business.
For more information, contact your local collections services.Share