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What`s the best way to collect from clients who won`t pay?

PRProPRPro subscriber Posts: 25

Even if you have a sound, signed legal contract in place, what are your thoughts on obtaining fees from clients who will not pay their bills?
Have any of you used the Better Business Bureau to collect funds? I`m doing research on this topic and would love to hear your suggestions.



  • BusinesswithcentsBusinesswithcents subscriber Posts: 2
    small claims court is an option
  • stonesledgestonesledge subscriber Posts: 608 Silver Level Member
    Hi Melanie.
    My clients have paid 99% of the time, my problem is doing business with vendors that don`t give us the deliverables promised. We are then promised to be refunded and it never happens. I currently have 2 vendors who owe us several thousand dollars. I sent letters, final demands etc. I then contacted the better busines bureau for one of them, and the vendor did not respond. I contacted their local clerk of court and set in motion a fraud case. The second, after hounding her for a year....and utilizing alot of time and energy she has paid 4 payments and one bounced. It can be very frustrating. The second was a board on the local chamber of commerce and I asked that she be removed and she was voted out. I would not normally do so but she lied over and over again and cost of alot of money and time and frustration and didn`t seem to give a hoot and even opened a new business, so i know she had the money. Anyway.,the BBB can`t do much but small cliams or general district (which is usually faster) can.
  • RicWillmotRicWillmot subscriber Posts: 14
    Contracts aren`t worth a cracker; as Melanie proves here in this post.
    I tell all the members in my Mentor Program to charge your clients up-front.

    It gets them focused on doing what has to be done

    Never have the uncomfortable situation of asking for late payments

    Keeps your cash-flow very healthy

    RicWillmot2/10/2008 8:29 AM
  • VideographyVideography subscriber Posts: 401 Silver Level Member
    How does someone enter a name into these credit reporting
    organizations? With so many people thinking about credit scores,
    wouldn`t it be useful if a small business could submit a no-pay
    customer into such a database?

    You have to be a member merchant.  The last time I checked into this it was not cheap by any means.
  • PRProPRPro subscriber Posts: 25
    Thanks for all of your input. It sounds like there really needs to be a better way to collect funds for small business owners (if you don`t collect upfront)!
  • KevDevKevDev subscriber Posts: 5 Member
    A couple of more ideas:Pick your customers carefully. If you have a bad feeling about a potential customer, walk away. Better to spend the time finding better clients than trying to get blood out of a beet.If your customer`s payment is late, always assume the best and give them a nice call asking when you can expect payment.If the nice approach doesn`t work, then start applying pressure. Often a letter from an attorney will open the money spigot.Finally, don`t be afraid to go to small claims court. But remember, if someone is really determined not to pay you, it may not be worth your while to try to enforce the court ruling (see point #1).
    Good luck!
  • glgcpaglgcpa subscriber Posts: 0 Member
    Here`s a couple more ideas, how well they work will obviously vary:Hire a collection agencyAsk them if they`d like to go on a payment planAsk if they`d like to barter the bill
  • PRProPRPro subscriber Posts: 25
    Thanks for the good ideas! Anyone else?
  • PRProPRPro subscriber Posts: 25
    Thanks for your suggestions!
  • RebeckaRebecka subscriber Posts: 0
    Hire a collection agency that reports to the credit bureau`s. They`ll keep a portion of the money collected, but at least other vendor`s will know they don`t pay their bills.
  • arstringfellowarstringfellow subscriber Posts: 0
    I chose to outsource my back-office management to a company called MBO Partners, which handles contracts, invoicing and collections, so I`m fortunate that they collect from non-paying clients on my behalf!
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