Here is a Tool Kit of reports, a process flow chart and an easy to use template to help you get paid.
Are you sick of chasing people for money?
It sucks doesn't it. You've worked your a** off listening to what they wanted and you know you completed the job the way it should be done but they are now refusing to pay you.
Debt Recovery Tool Kit. (because chasing people for money SUCKS!!)
But first . . .
What causes a payment dispute with a customer?
Things start out so well. You and your client are in close contact.
Everybody likes each other. The client even shouts you cups of coffee and doesn't mind if you have to start early to avoid the heat of the day. They even shares a joke with you most days.
Now, you haven't been paid anything other than your deposit and 1 progress payment; you've outlaid for materials and labour; The client is threatening to sue you for $140,000.
Everything's gone wrong!
You and your client relationship.
As strange as it seems, this could possibly be one of the causes of your problems. You have allowed the connection to get too close.
This person/firm is your customer, not your friend.
You have been engaged to carry out a defined scope of work for a defined price or rate - this is not a 'love job'
"Don't I have to get along well with my customers Paul?"
I hear you; and yes, you do.
But by letting the relationship cross the line into friendship you invite poor business practices into your work that will cause a payment dispute.
Keep the relationship friendly, but business-like at all times.
Debt Recovery begins with you and how you set up every one of your clients
in the first place.
Maybe you have been working for a larger firm who keeps sending work your way. It never crosses your mind to inform them of your trading terms. They are such a large business you guess they would just look after you.
You have to outlay for some materials and pay your workers but it's OK, you know you can expect your money shortly.
They pay you immediately you finish the job. Woo Hoo!
In fact, after a while, things are going so well, their work now amounts to 30% of your total business turnover. You make the decision to put down a deposit on a new vehicle on the strength of it.
Yep, things are looking sweet.
Then after a month or two they inform you (verbally) their payment policy is 30 days.
"But don't worry about the money . . . here's some more work!". They continue to pile on the work and you suck in your cash-flow belt - it's tight, but you put up with it.
Then a few months down the track they appear to have forgotten your last invoice. You call and talk to the accounts payable clerk who tells you "weren't you told . . . unless your invoices are in by the 25th of each month, you don't get paid till the next month!"
You start to panic.
How are you going to pay the workers for another month out of your reserves?
Then you get a call from the guy who allocates you all the work, telling you he doesn't know when you will be paid.
What do you do?
What Terms and Conditions you have on your invoice, matters - especially when you end up in court (heaven forbid) over the debt.
If you get work orders verbally - there is no written agreement between you and that big firm.
(Hint: If they don't at least email you the job, email them to confirm the details and remind them of your payment terms. This gives you evidence in case they deny giving you the work.)
Are you unsure what your options are when getting somebody to pay?
It's a visual diagram you need, to know how the debt recovery system works in many countries in the world (check with your local jurisdiction).
Once your debtor has exceeded your Terms of Payment, give him a call the next day (keep a record of every call you make - as evidence). If payment doesn't occur after 7 days, send him a letter of demand (you'll need to have done this, to show you have done all you can, to collect what's owed to you).
There's a FREE template for a very effective Letter of Demand down below, or click here to go there.
By the way, who do you know, who is also chasing people for money?
Do you think this FREE tool kit would be helpful for them too?
What about copying the link below and sending it to them,
with my compliments?
Here's the link to copy and paste into your email:
(I can almost hear them saying thank you right now)
Debt Recovery Tool Kit - FREE Resources:
Have you ever not been paid? Why your 'Terms and Conditions' on your invoice REALLY matter.
Having trouble getting paid? This tool looks at ways you can streamline your invoicing and a cool trick to 'cover your A**' when big firms just call you with work and there is no written agreements between you.
Payment disputes with clients. Have you ever had a client with unrealistic expectations? Here's the tool to stop that happening ever again.
Download this PDF (Debt Recovery Flow Chart) so you know what to do and where to go to get paid (before you have to go to court - and what happens after you do)
[NB This is a graphical overview applicable in many countries in the world (but check your local jurisdiction].
FREE template of a Letter of Demand here. Now you don't have to get it wrong when you decide to get a bit tougher about collecting what's making it hard to feed your family!
Debt Recovery - Definition of a 'Small Claim'.
Countries and State jurisdictions set the upper limit for a matter to be dealt with simply (with less cost), in a 'Small Claims Court (or Tribunal)':
e.g. New South Wales is $10,000 and California it is $5,000; New Zealand it's $15,000
Queensland it is $25,000
Scotland it's usually £3,000; United Kingdom has an online system for claims up to £100,000
Massachusetts it is $7,000; Utah $10,000 ; Colorado $7,500 ; Missouri $5,000 ; Pennsylvania $8,000 or here is a link to a table you can use as a guide in your US state (but check with a lawyer within your local jurisdiction)
Canada it's $25,000 Canadian dollars
European Union seems to have a limit of €2,000
South Africa is R12,000
All these jurisdictions have other conditions for a claim to qualify as a 'Small Claim', so it is best to research within your local boundary or ask a lawyer / solicitor.
NB I do not suppose to be qualified to advise on a 'Small Claim' under every legal juristiction in the world (that's the job of local lawyers). To access a more detailed approach to starting a 'Small Claim' in your particular country or state, click on the place you want, from the sample list below (or do what I did and Google 'Small Claims Court <then insert your state or country>', as a first step:
New South Wales Queensland
New Zealand (typical pathway in New Zealand is via their Companies Act and issuing a Statutory Demand, then maybe applying to put the debtor into liquidation. A last resort of course.)
Massachusetts ; Utah ; California ; Colorado ;Missouri ; Pennsylvania
United kingdom; Scotland
European Union (except Denmark); Finland
Debt Recovery made simple.
Well, how was that?
To learn more about Debt Recovery and a whole lot more business hints and tips, just fill in the boxes below and you'll be receiving the exclusive Missing Piece Marketing reports from me (if you don't already receive them):
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Here's to your Cash Flow!