How to deal with non-paying customers?

When you start and run a business, you expect your customers to pay you on time. Unfortunately, that is not always the case. Sometimes, you will have to deal with customers who pay a little late. Then there are clients who refuse to pay or disappear once you deliver the products to them.

It is not an ideal situation as you need them to pay you on time, especially in a big city like Atlanta. If they don’t, the business’s cash flow can suffer. This, in turn, can lead to problems for you when you have to pay a debt or loan that you have taken on.

Don’t worry though! In this blog, we will look at some tips that can help you reduce the risk of customers who don’t pay.

1. Know your clients

The first step is to know your client, especially, if you have never worked with them before. Google them, check their credit history, monitor their financial status, and more. If you are more proactive while researching your client, it will be easier to ensure that you don’t get work with people who will dupe you for money.

2. Take a deposit

It is best to take a partial payment or a deposit upfront. This way, you will get something for the hard work that you put in. You must clarify this point before you sign the contract. Even if you are giving products on credit, it will help to ask for a percent of payment before you can sell them products on credit.

The amount of deposit you can get is something that will depend on the industry that you work in.

3. Create a contract

It doesn’t matter who you are working with, a contract in words signed by both parties is necessary. A contract clarifies these points:

• The schedule of the payment- Upfront payment, mid payment, and after delivery.

• The terms, like what is the late fee? What is the interest? Also, it should include when will the debt go for collection, after 90 or 180 days?

• Last date of payment. Also, the grace period that you are willing to give.

• These are small details, but they make a big difference. A business can avoid a bad debt by using a clear contract, so don’t take this step lightly.

Even after taking all these steps, you can find yourself with customers who don’t pay. Here is what you can do about non-paying customers:

1. Hire a collection agency

If all your reminders and collection process doesn’t work, it's time to take help from experts. Hire a debt collection agency in Atlanta who is an expert in recovering client debt. They will ensure that they recover the maximum amount without harassing them or ruining your reputation.

2. File a lawsuit

The last option is that you sue the client for non-payment. It is a long process and can be taxing. If the ruling is in your favor, you can sell their assets and recover your money.

It is tough to deal with non-paying customers. Taking caution in the starting is your best bet.

Jackson Gilbert is a Blogger. With his skills, he has been helping fellow marketers and brands worldwide. When not glued to his laptop, he can be found making travel plans that rarely happen.