How You Can Safeguard Your Business From the Past Due Clients

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How You Can Safeguard Your Business From the
Past Due Clients
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• One of the most frustrating things in business is
  to provide your services or products to a client,
  only for them to stop returning calls and
  avoiding paying your owed dues.
• Past due clients are a problem that many
  businesses face, especially those in the staffing
  and recruiting industry.

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Effective Strategies for Handling Past Due
Clients
Past due clients can be a significant headache
for you and your business because of how you lose
out on money, whether you pursue a case or not.
Not everyone will know how to handle a client
that hasnt paid their dues effectively. This is
why we have put together a list of the things
that you can do to make sure that you can
effectively handle these types of clients. Well
first discuss preventive measures so you will
minimize the number of past-due client cases you
face.
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Get a Contract or Personal Guarantee Signed
One of the most important things to do when
doing business is to make sure that you have a
contract or a personal guarantee. This is
especially true if youre offering services or
products that will be paid for later. A contract
is a legally binding document, and you will be in
a much better position to collect from a client
with an outstanding debt if you have a signed
contract in your possession.
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You may think that this is a simple thing to do.
However, we still get a large number of clients
who failed to get their contracts signed. The
amount of trouble youre going to have to go
through is a far steeper price to pay than having
someone sign a contract. We have experienced a
debtors attorney using the excuse that there was
never a discussion to pay for the service because
the debtor never signed a contract. The worst
part is that this excuse held up in court. So
make sure to have a contract signed to avoid this
worst-case scenario.
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Make Sure That Your Contract Has Terms and
Conditions Protecting You
Now that weve talked about getting a contract
signed, now lets talk about the contents of said
contract. Your biggest priority when making a
contract is to make sure that it covers you
legally and ensure that your business partner
wont be able to get out of paying the money they
owe you. This is why you should make sure that
your contract has various terms and conditions
that ensure this.
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• Another thing you should be taking note of when
  making your contract is to make sure that it
  stays consistent. Always make sure that you check
  the wording in your contract multiple times.
• These changes can complicate things in a court of
  law and will tip the scales in favor of the
  debtor. Sometimes you may even end up voiding
  yourself out of your contract if you have any
  contradictory statements.

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Check a Clients Credit History Before Working
With Them

• One of the best ways to check whether a client is
  capable of paying for your products and services
  at a later date is to check their credit history.
• This paints a picture of how well theyve been
  paying other companies. A company that has
  been paying other companies on time will be great
  to work with. However, a company that has been
  paying sixty, ninety, or more days after their
  due date is a risk that you may want to avoid.

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• This can even be a sign that a company is
  starting to go under or bankrupt.
• There are several ways you can do a credit check
  on companies youre going to work with. One of
  the best ways is to go to a site that offers
  a credit check service like Experian, Equifax, or
  Dun Bradstreet.
• Their credit reports can help you decide a client
  is trustworthy enough to provide your services.
  However, in the end, it is still up to you
  whether you want to take the risk or not.

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Options That You Have if Preventive Measures
Dont Work

• Prevention is better than cure is a saying we
  like to say. This is why we want you to make sure
  you cover yourself with preventive measures
  whenever you do business.
• However, not every precautionary measure is
  perfect, and there will always be clients that
  will try to do their best to get out of paying
  their debts.
• In these cases, you have to take a proactive
  stance and make sure you choose one of two
  options whenever you have a past due client.

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Get a Lawyer

• The first option is something that all businesses
  will be familiar with, and that is getting a
  lawyer. If you want to take the case to court,
  then having a lawyer will ensure that you have a
  better chance of winning the case.
• A good lawyer will know the full extent of what
  they can do in a court of law and will do
  everything they can to win your case. They will
  also be able to protect you from being
  countersued.
• Once you have a lawyer, you should remember that
  he or she will now be your representative, and
  everything has to go through them before being
  handed out to your debtor.

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Have A Collections Agency on Call

• A great alternative to getting a lawyer is to
  have a professional collections agency step in
  instead. Many of these companies have the
  experience and expertise to handle most
  collections problems that you can throw at them.
• The best part is that most of them will have a
  specialized team of lawyers that have most likely
  handled a case similar to yours.
• However, you should know that each company will
  specialize in a specific industry to ensure the
  quality of their service. So you should make sure
  that you contact the right company for your
  industry for a better chance at getting your owed
  dues.

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Final Thoughts

• Past due clients are a significant problem for
  many businesses however, with the right
  know-how, youll be able to keep these types of
  issues at a minimum.