Every good business owner understands the importance of cash flow. The income generated from your services or your product is meant to be used within the business, whether it is to pay bills, pay salaries, or to save for emergencies. However, one of the negative parts of owning a business is that you begin to see some unfortunate practices that plague the consumer market. You will often become frustrated when the service you provide to your client goes unpaid for weeks, even months, which ultimately puts a giant kink in the flow of your cash. Even worse, when a client refuses to pay and you need to take them to small claims court, which even further exacerbates the problem by wasting valuable business time and expenses.
Hopefully that last point about small claims court never happens in your line of work, but you will more than likely at least have customers who take way too long to pay you for services rendered. If you get stuck in a situation such as this, it never hurts to make friendly and appropriate contact with the customer. More often than not, the customer simply forgets to issue payment. This can be done with a friendly phone call or a quick stop by their house. A good way to get into a conversation with your client about payment is to ask them if they are happy with the service you provided, then simply mention that their payment is due.
Additional Contact Methods
If you are in the predicament where your client still has not paid for your services, then pause to collect yourself and check if there is anything you can do to preserve your cash flow without having to completely lock up shop while waiting for payment. Check for any business financing options that you may need to take advantage of while also reaching out to your client again. Maybe a letter in the mail or another phone will do the trick.
The Collection Stage
As mentioned above, the cash flow in your business is important. If your client is still ducking your calls and avoiding payment, this is the moment where you might have to consider going to a collection agency. While not necessarily the best path to take when demanding payment, it is sometimes a necessary one in order to preserve your valuable cash flow. At this step you may also want to seriously consider business financing to keep everything flowing normal.
As you continue to grow your business, hopefully you will be able to avoid any issues such as the ones laid out above. However, if you ever feel like you are in need of advice or help with a situation like this, it never hurts to seek the help and advice from a professional.