Slow Pay or No Pay? Tips on How to Get Businesses to Pay-Up
Slow Pay or No Pay? Tips on How to Get Businesses to Pay-Up
Let’s start with preventing the problem. First, get a contract or letter of agreement, have it signed, dated for the services to be rendered. Forget a verbal agreement or a handshake. With the turnover in staff at all levels the person you make the deal with could be long gone by the time you need to get paid. SPELL OUT in clear English the dates that payments are to be made and the amounts. This holds up quite well if you need to get a lawyer involved for the collection.
Offer a discount if the contract is paid for in advance. 10% is a reasonable number. You’d be amazed at how many people will jump on this. There are tax advantages for some, there are others who like the 10% savings. Offer this incentive and it will work for a percentage of the business.
Next, take credit cards and tell customers that they will be charged on a certain date on the following months. It can be a fixed amount or the actual amount of the service. Get a credit card backup on all accounts. Tell customers that they have ten days to pay the bill by check OR, the credit card will be charged. You’ll know if there’s a problem right away if you’ve got money issues with a client. Why wait until they owe you several months worth of work find out?
Get paid in equal monthly amounts NOT based upon anticipated work flow. This way you get even cash flow month to month and can plan accordingly.
As for collections after the service has been performed, the best action for a business to take depends on the type of account that is in default and whether you want to continue doing business with the client.
According to attorney Kurt Olson of Plymouth, Michigan a former prosecutor and assistant city attorney who specializes in business law, “A letter from an attorney’s office advising that if payment is not made within a certain time period will result in litigation with increased costs, possible attorney fees and other sanctions will often be effective. The business should make sure, however, that the collection notice required by the Fair Debt Collection Practices is included in the letter,” says Olson.
In a Business to Business collection, the letter from the attorney should be probing to find out if there is a problem with the product or service or simply a failure to pay. Also, if the client has no expectation of a continuing business relationship then the letter should be stronger than if the client wants a continuing relationship.
Smaller businesses are more likely to view a letter from an attorney more seriously, says Olson, but in both smaller and larger businesses any envelope with a return address of an attorney gets read.
If the initial collection letter efforts do not result in a payment then it is time to consider litigation but because litigation is an expensive venture a cost benefit analysis should be discussed with an attorney.
“If the amount of debt is small then a business owner will want to consider small claims court which is informal and less costly with a good chance of getting a recovery,” says Olson. “But in small claims court the business owner cannot be represented by an attorney but most appear on his own behalf.” In Michigan any bill for $3,200 or less can be processed in small claims court.
Some businesses consider hiring a collection agency as an option, says Olson, but an agency often will take only those cases they are sure of success and then will take 50% of the amount collected as their fee. For Olson’s clients fees can run from $125 for a simple letter to several thousand for litigation. Clients also can choose to work on a contingency fee basis.
Do bad things happen to good people? Yes you bet. Even as I write this I have clients who are negatively impacted by the changing economy and have slowed down their payments. What can be done about that? Stay in touch with the client make sure they know you are working with them. Furthermore if it’s a larger firm and others pay the bills, stay in touch with the person responsible for paying the checks, signing the checks etc. Develop a relationship with them, be polite, do not demand, be friendly, so when they have a chance to pay someone they select you over someone else. Sound simple? It is.
Slow Pay or No Pay Tips on How to Get Businesses to PayUp - To learn more about this author, visit Scott Lorenz's Website.
Like this article? Share it with your friends
In today’s turbulent times with money being tight in this new slow economy, many customers who normally pay their bills on time are now delaying payments or choosing not to pay at all. Is this happening to you? If so, here are a few tips to recover your money and to prevent this from happening in the first place.
Let’s start with preventing the problem. First, get a contract or letter of agreement, have it signed, dated for the services to be rendered. Forget a verbal agreement or a handshake. With the turnover in staff at all levels the person you make the deal with could be long gone by the time you need to get paid. SPELL OUT in clear English the dates that payments are to be made and the amounts. This holds up quite well if you need to get a lawyer involved for the collection.
Offer a discount if the contract is paid for in advance. 10% is a reasonable number. You’d be amazed at how many people will jump on this. There are tax advantages for some, there are others who like the 10% savings. Offer this incentive and it will work for a percentage of the business.
Next, take credit cards and tell customers that they will be charged on a certain date on the following months. It can be a fixed amount or the actual amount of the service. Get a credit card backup on all accounts. Tell customers that they have ten days to pay the bill by check OR, the credit card will be charged. You’ll know if there’s a problem right away if you’ve got money issues with a client. Why wait until they owe you several months worth of work find out?
Get paid in equal monthly amounts NOT based upon anticipated work flow. This way you get even cash flow month to month and can plan accordingly.
As for collections after the service has been performed, the best action for a business to take depends on the type of account that is in default and whether you want to continue doing business with the client.
According to attorney Kurt Olson of Plymouth, Michigan a former prosecutor and assistant city attorney who specializes in business law, “A letter from an attorney’s office advising that if payment is not made within a certain time period will result in litigation with increased costs, possible attorney fees and other sanctions will often be effective. The business should make sure, however, that the collection notice required by the Fair Debt Collection Practices is included in the letter,” says Olson.
In a Business to Business collection, the letter from the attorney should be probing to find out if there is a problem with the product or service or simply a failure to pay. Also, if the client has no expectation of a continuing business relationship then the letter should be stronger than if the client wants a continuing relationship.
Smaller businesses are more likely to view a letter from an attorney more seriously, says Olson, but in both smaller and larger businesses any envelope with a return address of an attorney gets read.
If the initial collection letter efforts do not result in a payment then it is time to consider litigation but because litigation is an expensive venture a cost benefit analysis should be discussed with an attorney.
“If the amount of debt is small then a business owner will want to consider small claims court which is informal and less costly with a good chance of getting a recovery,” says Olson. “But in small claims court the business owner cannot be represented by an attorney but most appear on his own behalf.” In Michigan any bill for $3,200 or less can be processed in small claims court.
Some businesses consider hiring a collection agency as an option, says Olson, but an agency often will take only those cases they are sure of success and then will take 50% of the amount collected as their fee. For Olson’s clients fees can run from $125 for a simple letter to several thousand for litigation. Clients also can choose to work on a contingency fee basis.
Do bad things happen to good people? Yes you bet. Even as I write this I have clients who are negatively impacted by the changing economy and have slowed down their payments. What can be done about that? Stay in touch with the client make sure they know you are working with them. Furthermore if it’s a larger firm and others pay the bills, stay in touch with the person responsible for paying the checks, signing the checks etc. Develop a relationship with them, be polite, do not demand, be friendly, so when they have a chance to pay someone they select you over someone else. Sound simple? It is.
Slow Pay or No Pay Tips on How to Get Businesses to PayUp - To learn more about this author, visit Scott Lorenz's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
|||
George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
|||
Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
|||
John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
|||
David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Scott's articles
 | |
|
|  |
 |
|
Scott Lorenz Video - Book publicist Scott Lorenz
is President of Westwind Communications, a public relations and marketing firm with a special knack for working with authors and entrepreneurs to help them get all the publicity they deserve and more.
Lorenz works with bestselling authors and self-published authors promoting all types of books, whether its their first book or their 15th book. Hes handled publicity for books by CEOs, Navy SEALS, CIA Officers, Homemakers, Fitness Gurus, Doctors, Lawyers and Adventurers. Hes generated media coverage for numerous genres including, fiction, health, romance, business and children.
|
|
|
 | |||||||
|
 | ||
 |
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Free Marketing Plan Template Million $ Interview Law of Attraction in Action Branding The Product Fortune Small Business |
|
 | ||
 |
Top 50 Franchising Blogs
Top 50 Franchising Blogs | |
 |
Top 50 SEO Posts - 2008
Top SEO Posts of the Year | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
| ||||||||||
|
| ||||||||||
|
|
||||||||||