Companies throughout the nation depend on their customers. Having a large and continually growing clientele obviously increases profits and helps to keep a company afloat from a financial perspective. When customers make purchases or pay for services, their money goes into fostering the company. At the same time, customers serve as valuable advertising tools. They spread the word about a business’s products, services, and other attributes. Whether they speak with people in their social circles or leave reviews on a company’s website, they provide the word-of-mouth advertising consumers so readily trust.
When Customers Go Awry
While most customers do what they’re supposed to and pay for goods and services as promised, that’s not the case with all of them. Unfortunately, some ultimately refuse to pay for various reasons. Some say the company to which they owe money provided sub-par services. Others inexplicably refuse to make their monthly payments and suddenly become unavailable for contact. Regardless of the issue, you don’t have to settle for clients ghosting you. Help is available.
What to Do If a Client Refuses to Pay
One of the most effective methods of getting the payments to which you’re entitled is to seek legal help. Attorneys like those at https://feldman.law/ can take action on your behalf to try to get the client to pay. In some cases, simply receiving a letter from an attorney is all it takes to encourage someone to settle up on a delinquent account. Other times, though, the case may have to be taken to court. Consider taking a few proactive measures to keep the situation from escalating to this point, though.
Credit checks are effective proactive measures for today’s businesses. They give you an idea of prospects’ credit histories, including their track records for covering their financial obligations. If they have a history of falling short on their payments to other companies, there may be a chance they’ll do the same to you. When a credit check returns negative results, don’t finance anything for that particular prospect.
Business contracts are also crucial proactive measures for companies. Whether you’re financing expensive jewelry or providing remodeling services, don’t enter into an agreement with a client without having a written contract in place. Contracts detail exactly what you’re providing to clients and exactly what you expect from them in return. Once the client signs the contract, he or she is legally obligated to follow through with it as are you.
Don’t Be Shy About Late Fees
Charging late fees is another effective way to help prevent clients from failing to pay. Late fees can truly add up over time. Even a charge of as little as $40 per month will amount to nearly $500 per year, so that’s often motivation enough for clients to pay on time. While offering a certain amount of leniency in extenuating circumstances is advised, be sure to set boundaries so clients won’t take advantage of your kindness.
Receiving the Pay You’re Entitled To
Charging late fees can help encourage clients to make payments on time. Running credit checks will go a long way toward preventing you from entering into an agreement with a client who has a habit of not paying for goods and services. Being sure to draw up contracts beforehand and having clients sign them is another way to protect yourself. If all else fails, though, don’t hesitate to seek legal assistance.
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