These people are clearly not hurting for money. I have a small business, and have appealed to them for the payment that was due on completion of the job, and a darn fine job I did, too. Still, they never send the check. Before taking them to court, which to me is ridiculous for the amount of money that is owed, does anyone have any tips on how I can collect the money due me?
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Well, not so much on this one, but adding a balloon interest charge for late payments as a processing fee seems to work for most. If your contract is verbal then good luck with that.
ME!
PS sometimes listing those who are behind on their payments in the local paper helps, but local laws varry so get legal advice first.
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Be persistent. These people are trying to wear you out. Start calling them daily, just like a bill collector (that’s actually what you are at this point). Prepare what you are going to say in advance and call. The more you call or knock on the door, the more likely they are to pay.
Consider asking for partial payment to ease your burden. Ask them when they will pay the balance.
Create an escalating scale of the steps you will take. For example, week 1, call daily and ask for payment. Week 2, knock on door. Week 3, sent attorney letter, week 4, etc. In short, prepare a war plan.
Make a genuine effort to collect this yourself, then consider hiring an attorney to send a registered letter. If you belong to a professional association, you may have access to discounted collection agency services but they usually take a large chunk of what is owed to you.
Keep trying! You’ll get paid.
Source(s): Owner of 2 small businesses with up to 1 million in account receivables at any given time (most of it from overseas). I’ve always gotten paid.
I am so sorry you are having this experience.
Even though you might not want to actually take them to court it can be very useful to send a ‘Letter Before Action’ to a client who is refusing to pay, to jolt them into action. Sometimes that is all it takes. There are templates for LBA’s on the internet but if you can’t find them let me know and I will send you one. An LBA includes a bit about ‘interest accruing on an unpaid fee’.
Do you get your clients to sign a set of Terms and Conditions before you start work for them? I do now and usually if they are inclined to delay payment it can help to get them moving. You also say that they are not hurting for money but appearances can be deceptive and maybe they are struggling so it might be worth asking them if there is a reason that they have been unable to pay you – and offer to work with them to find a solution. All the time, reminding yourself not to work for them again once you’ve got the money from them.
I sometimes ask new clients for a deposit so that if they are inclined not to pay I have at least got something.
I hope this helps. And good luck.
Alison
Over the years I have found that the people with real wealth are often the slowest of payers… they’ve forgotten how difficult it is to survive without cheese. Let them know how difficult it is for you to survive without any cheese coming in.
My services are not retrievable so I understand the problem. One time, I made the authorities application on behalf of a client.. and when the client flat refused to pay me… I simply withdrew the plans from the authority and recovered part of the application fees. The client was livid over this but had no intention of paying. In teh interim the authorities changed its planning policies, so no plans could be lodged for the type of development proposed and the client lost many hundreds of thousands of dollars… because he wouldn’t pay my agreed fee. We both lost money on that job, but I won the fight.
The legal fees in collecting a small debt are horrendous and your client knows it is not worth your while. If you can claim it representing yoruself, then you have won that battle of wills.
Some people seem to try to stay wealthy by ripping everyone off if the chance comes around. I got so sick of the games people play that most of my income is derived from gov’t contracts. THey dont pay well, but payment is guaranteed if I do the work.
I`m sorry that I`m no help, but I`ve been lucky enough to deal with honorable people. Perhaps if you vette your clients before accepting the job, you will have better results. LUV
You should put together one of those traps from the Saw movies. If that doesn’t scare them enough to pay you, then make sure they sign a blank check before the trap kills them.
send them a threatening letter?