You may have a client stiff you on their bill (or spend an inordinate amount of time trying) on occasion, but the real problems can come when another business refuses to honor their bill. Generally speaking, those dollar amounts are a lot bigger than the typical consumer debt.
So what can you do to get a business that’s reluctant to honor their debts to pay up?
Follow your industry’s processes and follow your instincts
Sometimes, a good business relationship is worth preserving — and worth more than the unpaid debt. If you know that the other business is normally reliable, maybe reach out to their owner or business manager and see if you can negotiate a friendly agreement that will allow them to catch up.
If you’ve dismissed that idea or already tried, it’s time to move on to the next steps:
- Is the debt more than 30 days old? If so, it’s definitely time for a written demand for payment. You need to inform the business of their past-due debt, give them the opportunity to respond and clearly state any alternative options they may have to resolve the debt.
- You may need to engage in a little research to find your debtor. If the company seems to have vanished, your mail is being returned and nobody is answering your calls, it may be necessary to look into the company’s (or the owner’s) other locations or holdings.
At this point, it’s often advisable to work with a seasoned debt collection attorney. Not only does a collection letter from your legal advocate’s office tend to carry more weight, it can also serve as the first step in a collection lawsuit.
When you have a debt collection issue
Ultimately, the goal is to get your debtor to pay their bill — not end up in court. If you do have to get a judgment on the debt, an attorney can help you collect.