Nonpayment issues can be devastating for a business. In many cases, the services have already been rendered or products have been shipped. You expected to be paid for those invoices, but the payments never came in.
Why does this happen? It’s not simply that the other business owner never intended to pay, at least not in most cases. But there are a lot of different situations that can derail those plans.
Honest mistakes
For one thing, honest mistakes do happen. Perhaps an invoice got lost. Maybe a check was mailed and never arrived. Maybe an electronic payment was sent but was never finalized because a paper check was expected. There are a lot of different issues that could lead to confusion or complications, but that doesn’t necessarily mean that there was an intent not to pay.
Unexpected expenses
Another potential reason is that the business itself has unexpected expenses that go beyond what was anticipated. Maybe they bought services or products from you, fully believing that these would fit within the budget. But those unexpected expenses ruined the budget and they had to choose something that wouldn’t get paid that month.
Partial payments
There are also cases where people will pay part of what they owe but not the full amount. This is perhaps better than not being paid at all, but it’s still a serious financial complication for your company. You still haven’t been rendered what you were owed.
If any of this happens to your business, you know that it can really impact your livelihood. Make sure that you know exactly what legal options you have at your disposal.