How
to Protect Your Business
Without Losing Your Customers
Good business
is an act in three parts:
-
getting customers in the door
-
doing the work or providing the merchandise
once they're there, and
-
getting paid.
Eliot Wagonheim,
commercial litigation attorney, encourages businesses not to feel
helpless when clients refuse to pay. Drawing from years of professional
experience representing the financial interest of hundreds of
businesses, he offers excellent, sound advice for business owners
on managing their accounts receivable and collecting all the money
owed them.
According to
Wagonheim, every time you write off a debt, or neglect to pursue
one, whether it is the result of a bad check, an old account,
or a deadbeat client, you give away your money. His new book,
Get Your Money!, started out as private
lessons to his clients on how to collect money on their own when
the legal fees would amount to more than the claim was worth.
This book is a good reference to give you the best business and
legal advice without the lawyers bill.
Wagonheim details
several straightforward steps small business owners can take to
get their hard-earned money back. They include:
-
Draft an easy-to-follow Payment
policy that spells out the terms of your agreement
-
Ask you client for trade references
from his or her customers
-
Size up new customers to satisfy
your comfort level
-
Ask for payment in advance or
by credit card to maximize your cash flow
-
Include your interest-charging
policy on invoices to avoid unpaid, past-due balances
-
Allow discounts for prompt payment
-
Be sensitive to the warning signs
slow or non-paying clients exhibit, such as failure to return
your phone calls or bounced checks
-
Keep a record of every client
contact for valuable evidence, if needed in court in the future
-
Stop giving credit to overdue
customers
-
Set a schedule of contact with
the debtor, be firmer with each contact, and avoid making
threats
-
Consider alternative dispute
resolution-referring the dispute outside of court to a neutral
3rd party
-
Consider whether you meet all
the requirements for bringing your case to court
-
Find out how to recover your
money from a debtor who is deceased, dissolved or disappeared
-
Learn how to prepare and file
a claim against a nonpaying customer
-
Understand the various ways to
handle the defendant's response to your complaint
-
Whether you ask for a postponement
of a trial date or for a renewal of a summons, get all communications
with the court in writing
-
Know your options before you
settle a case and learn how to negotiate a settlement
-
Make an effort to understand
the other side's needs
-
Prepare for trail, including
your own testimony, evidence and questioning of witnesses
-
Be mindful of courtroom etiquette
by being respectful to the judge and the opposition
The UALR Small
Business Development Centers are located statewide. They, too,
can help you develop strategies and know how to improve your collections.
Contact them for their seminars on collections, to use their libraries
for collection procedures, or to meet with a counselor to help
you with your particular business receivables needs. Call toll
free 800-862-2040 or in Little Rock 501-324-9043 or www.asbdc.ualr.edu.
