The past few months have been hard on the small business community here in New York City as elsewhere. Businesses that might be seeing only a slight summer slump at this point in the year may now be teetering on the precipice of bankruptcy.
While all of these factors may be completely out of your control regarding the health of your small business, one area in which you do have some control is settling outstanding financial accounts.
What's the best method of collecting unpaid funds?
Is should go without saying, but make sure that you are invoicing your client regularly. With all that is going on in the world, an unpaid bill is easy to slip the mind, whereas an invoice is a tangible reminder that a payment is needed.
There's no need to get uncivil, but red-stamping invoices as "Past Due" is another attention-getter. If this is a customer or client who you regularly encounter in your bodega or store, you may want to discreetly mention the matter of a past-due bill.
Loop in your lawyer
Forbearance on a debt at a time when many Big Apple residents are struggling to make ends meet can rack up the karmic points — but karmic points don't pay your bills, either. At some point, you will either have to write off the debt as uncollectible or you will have to enhance your collection efforts.
One way of doing so without alienating your customer by sending them to a collection agency is to have your small business attorney write them a discreet letter urging them to clear the balance on their account. For many indebted clients, that may be all you need to do to impress upon them the seriousness of the debt.
Of course, there will always be some who will try to avoid paying legitimate bills. For those individuals, another remedy may be necessary.
Take them to court
For claims of lesser amounts, you can use small claims courts where many people represent themselves. Of course, you are always free to have your attorney handle the case whether in small claims or the larger courts for bigger sums owed.