How do you deal with non paying business customers

[nesrinamb]

I meant technicians lien and yes completely legal in california for me to do that as long as I follow the proper procedures, i always treat my customers with respect and i help them as much as i can but if i have someone who decides to skip out on payment i will do what ever the law allows me to do.

@ the OP look up the law and see if you have some type of law similar in texas i know that you said you likely don't have that but look twice to make sure also take a look at the laws for auto mechanics as certain types of those laws actually apply to computer techs.

I found out about the law when a friend that does repo told me about it and then one day he did a big repo for a company that fixed servers that had an issue with a client that didn't pay

 

[Joseph_]

pay me

I also require a down payment of 50% upfront as a rule. I don't waste my time on clients who can't afford my services. I'll just regret it in the end.
As with the invoice, I practice sending those to my client regardless of how big or small the project is and even if it isn't needed. In our initial conversation I state the details on when they will expect the invoice, and how long they'll have to pay them. Now for the late payment problem, it is stated on my contract that there are additional charge of 5% for every month overdue. I guess most of my clients don't want that and I don't like it either. I have experienced late payments but still got paid.

 

[Mr.Mike]

I also require a down payment of 50% upfront as a rule. I don't waste my time on clients who can't afford my services. I'll just regret it in the end.
As with the invoice, I practice sending those to my client regardless of how big or small the project is and even if it isn't needed. In our initial conversation I state the details on when they will expect the invoice, and how long they'll have to pay them. Now for the late payment problem, it is stated on my contract that there are additional charge of 5% for every month overdue. I guess most of my clients don't want that and I don't like it either. I have experienced late payments but still got paid.

Thank you for the link Joseph! Very good article. Everyone talks about guerrilla marketing, but no one talks about guerrilla collections!! Good Post.

BTW, I would make the additional charges per month 10% and then after three months, 20%. You might lose the customer, but if they haven't paid you in that length of time, you don't need their business, right?

 

[Knightsman]

If I don't have a check within 15 days, I call and figure out whats going on. If they don't pay after 30 days, I will go by there and figure it out. @ 45 days, I'm threatening legal action. at 90 days, I'm filing paperwork.

I still have to pay my bills, and the time I spent with a non payer I could have spent with someone that pays. I always require parts upfront.

 

[Wheelie]

Sue them in small claims court or write it off.

It's fairly easy to sue them in small claims court. You'd probably get paid as soon as they received the notice to appear. If they were stupid enough to actually appear in court they'd probably lose in less than 5 minutes if you had all your ducks in a row.

 

[sedigital]

It's not worth the litigation to prove a point. I make any business fill out a credit app with trade and bank references before I ever let them charge. In addition to this I require a backup source of funding such as a Visa/MC with an authorization form filled out.

I usually offer Net 15, though I have a few clients on Net 30. I will be changing things very soon and doing 1% Net 15 and 2% Net 30, which means interest starts getting calculated immediately (Quickbooks does a great job of this). I'm also working on a discount level for Debit, Cheques and Cash to ensure I can phase out or reduce my terminal costs long term.

I also set a maximum charge limit on accounts. If a customer wants to do service, I usually cap the charges on the account at $500. If they order inventory I'm flexible and cap it slightly higher as long as they already have an established track record.

Oh and in cases where people don't pay, after the first invoice is missed I send out a paper with their statement explaining that their account is on hold. If they still haven't paid by their next statement without a valid reason their ability to charge is terminated, interested gets calculated, and they cannot reopen a charge account for a year.