Despite inevitable glitches with obtaining supplies and building materials, you completed the project on time and are rather proud of the work your company did. You may have even allowed the customer to make last minute changes that were inconvenient for you but satisfied the client. Perhaps you hoped this would help you build a positive reputation and a repeat customer.
However, day after day you check your account for payment, and it is not there. You are watching your account balance dwindling while you wait for the customer to pay for the work you did, but weeks have passed since you mailed the invoice, and you are starting to wonder if you will ever get your money.
Why won't they pay me?
There is every possibility that the customer misplaced your invoice or simply forgot. If your customer is dealing with other critical bills or has a woefully disorganized accounting system, there may be a perfectly understandable reason for not paying. In these cases, a simple reminder may do. However, some customers may place your invoice at the bottom of their priority list.
Without a doubt, your employees want their pay at the end of the week, and when customers don't fulfill their obligations, it may leave you in a tough position. Additionally, you have your own bills to pay to keep your business running. Time you spend dealing with a customer who won't pay is time taken from your company's productivity and may begin to wear on your business' reputation.
Show me the money!
To avoid this situation in the future, there are some steps you can take from the moment you deal with a new customer. Other business owners have used these techniques to reduce the number of issues they have with slow paying customers, including:
- Explaining your price, payment terms and penalties for late payments before you begin any work
- Following up with a personal call or email, rather than an automated call or form letter, to remind the customer that payment is due
- Continuing to ask for your money, but keeping your emotions under control
- Seeking legal assistance
There comes a time when you have to decide if it's worth pursuing. Are you spending time and resources trying to get a few hundred dollars, or does the customer owe you thousands? An attorney can help you evaluate the situation and determine the best course of action for your business. Additionally, you may consider filing a mechanic's lien on the customer's property. An attorney can guide you through the legal steps of this process to ensure you recover the money your customer owes.