If you are a small business owner, you understand how challenging it is to remain operational without dipping into the red. When a client or customer fails to pay on time or at all, it can inspire significant financial stress and disrupt your operations. Even if you aren’t ordinarily a confrontational person, if your small business is owed a significant payment, it’s likely important to act quickly and strategically to recover what you’re owed while maintaining professionalism and protecting your business relationships.
Before taking action, however, it’s important to assess the situation thoroughly. Sometimes, non-payment may result from simple misunderstandings or errors, such as an invoice being lost or an oversight in the payment process. If you have not already done so, you will want to reach out to the client with a friendly reminder and confirm that they’ve received their invoice. This initial step can often resolve issues without escalating the situation.
If your initial efforts don’t yield results
If your initial reminder doesn’t result in payment, it’s time to escalate your approach. You’ll want to tread carefully, however, as there are debt collection approaches that are prohibited.
In some cases, a client may be experiencing financial difficulties that are making it difficult for them to pay the full amount owed. If maintaining a positive business relationship is important to you, consider offering a payment plan or negotiating a reduced amount in exchange for immediate payment. This approach is the opposite of aggressive and may be sincerely appreciated by your client.
With that said, there are times when taking more aggressive is necessary. This is often especially true if an amount owed is substantial and the client who owes that amount is repeatedly resisting your efforts to help them make good on their debt. In scenarios like these, seeking personalized legal guidance and support is generally wise.