Monthly accounts not paid

Storefront
1

I’ve had a few customers go bust on me, an obviously not pay me, one actually owes alot of people in town money and has left town :-s

my question is, how long do you let them get away with out paying?
I’m refering to weekly/fortnightly customers that pay on a end of month statements.

I’ve just started if they havn’t paid for 3 months I’ll send out a letter requesting payment within 14 days, or the service will be suspnded and further action taken (I’ve threatened court action on one and he eventually paid (12 months after I suspended the service)

what are your policies on this? does anyone charge late fees? any suggestions on how to make sure they keep paying?

1 Like
2

If you are at your wits end with these customers and you have called/sent notices several times, you can do a few things that I have done over the years that will help in getting paid by these thieves.

They obviously look at your company as a little business that will eventually “Go away” because they know how to play small businesses. Its a game of who will give up in frustration. Unfortunately, they have a slight advantage. I have listed the three major actions that I take when I have nothing to lose at that point.

[B]Step 1[/B]
#1) Send them mail that is documented delivery by the US Postal Service.
Dont send the one that they have to sign for. They will usually turn down signing it (its part of their dodging game). Ask the post office to send it certified or registered mail. Its one of those. I cant remember which one it is.

[B]If this doesnt work, go to step 2[/B]

#2) Call them a few times a week. Tell them over the phone a time line of their accounting history. Example: Mr. Jones, I have sent our three invoices over the course of three months (cite dates to them, and dates you made calls to their business). They will get the feeling that you are documenting everthing. Tell them about the registered/certified mail that you sent them. Cite the dates on the reciepts to them too. This shakes up the dodging game a little for them.

[B]If this doesnt work, go to step 3[/B]

#3) Go to your local court house and pick up small claims forms. Bring them home and fill out all of the information. Make a copy that isnt signed by you just yet. Send them a letter with a copy stating that if payment has not been received in our office by Friday October __, ( 5 business days from the date on the letter) you will have to other option but to submit this form to the ________ county small courts.

I have had frantic people call me two to three days later after getting the information begging to charge their credit card. I have even had them come to my shop knocking on the door. One guy FEDEX’d his check next day!

You can take this advice or not. Is it legal to do things in this fashion? I dont really know for sure. I will tell you this though, if you threaten to take them to court, you must follow through with it. They can take you to court if you dont charging you with mental anguish or something along those lines.

Last but not least, be professional with them on the phone. Dont argue or threaten them. Document everything…
Steve

4 Likes
3

winderwasher told you :[B]Step 1
#1) Send them mail that is documented delivery by the US Postal Service.
Dont send the one that they have to sign for. They will usually turn down signing it (its part of their dodging game). Ask the post office to send it certified or registered mail. Its one of those. I cant remember which one it is.[/B]

A quick little gorilla marketing technique I picked up on a few years ago, and have had good luck with myself…If they won’t sign for your certified mail…put a bunch of one and two cent stamps on it equal to postage or write “LOVE YA” on it with a magic marker (or do both). They will sign for it (would love to see their face when they realize what they’ve signed for) and it gives you another piece of paper to carry to claims court.

The gratification of tricking the “dodger” to accept is a moral booster. I used it on my ex when she wouldn’t accept divorce papers and it worked there too.
Good luck,

[I][B]“because glass looks it’s best when you can’t see it”[/B][/I]

4

You can also fax harass (We call the term faxual harassment) them to death too. Just make about 20 copies of the bill and fax them in the evenings over and over and over. Office personnel usually get ticked and they will tell their boss that they are getting tired of reloading the fax machine every morning:D

A couple days of this and they will be screaming uncle! Uncle!:smiley:

5

be a PITA…ive had a lot of success w/that approach. Dont be mean be firm, be PERSISTANT!! They assume that u will eventually give up. The last 2 unpd customers i had were 2 women. I also had their parents as customers, so i left a note on each parents invoice that i was trying to collect past due balances from their daughters but wasnt having much luck w/reaching them. The parents both pd for their daughters invoices, as I suspected they would and they were very apologetic. Will it always work? prob not. But i do what i can to get whats owed me. And of course the 2 daughters will not be customers of mine again. Ive never done late fees, ive threatened court action but you have to be prepared to go to court if you threaten it.

6

We started adding late fees of 2% of the unpaid balance about 4 years ago (2% is the maximum allowed by law last time I checked). I used to not have a late fee on my invoice but people were paying 30 and 45 days out. It really jams up your payroll if you are paying your crews and nothing is coming in.

My guys are well trained now in getting paid when the job is finished. If a client would rather send it in, (like online banking) we just tell them that they have 15 days to pay before a late fee is added and leave it at that.

For those of you that dont have a late fee on your invoice, I would STRONGLY RECCOMMEND getting one on there ASAP! It is amazing what a difference it makes in account receivables. Just like a good marketing piece, it has to be short dated to get their attention or it just ends up in the garbage or should I say in their stack of unpaid bills that hardly ever gets gone through.

7

When you added the late fee, how did you let your current clients know?
did you send out a letter and let them know? or just add a comment to the invoice?

I’ve been thinking about doing this… 99% of my customers pay well… but there are those few that get annoying

8

Ian,
Sorry so late getting back to you on a reply. The answer to your question is no. I just re-designed my invoice layout to have a highlighted box showing “this amount due if not paid by” box. It does work wonders. My invoice also has an area for credit card payment that helps greatly in getting paid on time and very quickly. Hope this helps. Steve

9

In florida there is a law against faxing without approval. Has something to do with tieing up their fax line and ussing their paper or some sillyness along those lines.

10

Federal Junk Fax Prevention Act

11

U guys have it all wrong !! About 20 or so years a ago i had a cafe with slow pay !! So saturday nite i went out for dinner and bought there bigest steak with all the trimings !! Ya !! U got it right !! Walked up to owner and said super good steak and wrote my name and co. On the check !! Gave to him and he looked at it !!your bill is paid i said !! That’s how i’ve done it for 20 plus years !! Works for both of us !! I clean his home too !! Stan, pro window kleening for 26 years and proud sorbo user !!

12

We like to add that “an ANNUAL Percentage Rate of 24% will be charged to the unpaid balance”. It’s still the 2% interest per month (as allowed by law), but the 24% may scare them into paying.

13

They will most likely ignore it or get rid of you.

14

Can you only apply the 2% once a month or every 15 days like you have in your invoices?