Dealing With Past Due Accounts

Dealing With Past Due Accounts

The best part of working for yourself is getting paid! But what happens when you aren’t paid on time? Unfortunately, nearly every business will experience this at one point in time or another. For process servers, many of whom work as independent contractors, collecting payment can become difficult. Keep reading to learn the best way to deal with delinquent payments and past due accounts.

Collect Payment Up Front When Possible

Obviously, the easiest way to handle a past due account is to not have the account become delinquent in the first place. There are a few safeguards that you can put in place to prevent this. The first is to collect payment up front. This ensures that you will be paid for your services and that you won’t be stuck having wasted your time and money. If you are not able to collect full payment up front, you may ask for a deposit or partial payment, especially on large jobs and for new clients. By asking for some of the money up front, both you and your client have a shared risk, making it less likely that either one of you would neglect your part of the agreement.

Include Remedy For Past Due in Contract

Before you begin working for a client, including a provision in your service agreement or contract that clearly states what will happen in a past due situation. This can prove to be beneficial if you’re faced with a client who is not paying their bill on time because you can refer back to those agreed upon terms. Whether those terms include a late payment fee, a provision for legal fees in the event it is necessary to go to court, or a percentage increase, this may be an option that can help discourage accounts from making late payments.

Clear, On-Time Invoicing & Reminders

It is important that your clients can clearly read and understand the invoices that you send — and that your invoices are also sent in a timely manner. If your system isn’t automated where it sends out an invoice as soon as a job is complete, be sure to stay on top of invoicing. Make your payment terms easy to find and read on the invoice so there is no question of what payment amount is due for what services and when.

Make Payment Options Available

Offering your clients more ways in which they can pay you will certainly increase their ability to pay. If you only accept cash or check, it could severely limit your ability to get paid. Allowing for more payment accessibility (payment accepted online, by credit card, ACH payment through a bank) will certainly add convenience for your customers, but it may also increase your odds of being paid on time.

Work With Your Clients

If you have a client whose payment is past due, send reminder invoices at regular intervals (non-payment after 3 days, 7 days, 30 days, etc.) that clearly state when the bill was originally due, how many days past due, and make it clear that payment is due upon receipt. If you aren’t getting a response, give your client a call. It may be that they genuinely missed the payment due date by accident or that a major life event occurred making it understandable why they missed the deadline. Sometimes just simply opening up the lines of communication over the phone can change your circumstances.

Last Resort: Small Claims or Collections

If all else fails, and what you have lost in revenue is a substantial hit, it may be worth it to send your client to collections or to take them to small claims court to recover the payment.

Always Be Professional When Dealing With Past Due Accounts

Above all, be sure to express professionalism at all times, no matter how upset you are that your client has not paid you. Keep in mind that being professional will never hurt you or your business’s reputation, when behaving in an unprofessional manner can. Talk with your accountant and/or lawyer to get advice for your particular business and to see what methods may work best for you.

With offices statewide, Direct Legal Support, Inc. remains open to assist you with your legal support needs including California court e-filing and service of process in California. All of our California process servers are bonded and registered.

Keep up to date with our Court Closure Calendar we will be updating this daily as court updates come in.

As always should you have any questions or require immediate assistance contact Direct Legal Support at (213) 483-4900 and you will be able to speak to a live person.

Direct Legal Support, Inc.
Registered & Bonded California Process Servers
Established 1961
Call: (800) 675-5376
Email: support@directlegal.com
Visit: www.directlegal.com