Tips for Collecting Your Invoices, or Debt Collection for the Business Owner

Before conducting business with an entity:

Add language to contracts to include “in cases of default or failure to pay, buyer will be liable for all costs of collection, including reasonable attorney fees and court costs.”

Add language to contracts or invoices that “interest on all unpaid balances over 30 days will accrue at 1% per month.”

At sale or engagement of services:

Obtain details of customer, such as social security number (for credit report), home and business addresses, name of employer (for wage garnishment), exact name of business entity and position within business of person signing contract, banking information (such as copy of check for bank attachment).

Consider a personal guarantee by principal or corporate officer.

If debt is improvement to real estate (doing work or furnishing materials relative to real estate), note that mechanics lien must be filed within 120 days of providing work or materials, or that collection method is lost.

When bill is not paid:

Bounced check statute- certified letter to debtor stating that if check, plus $25 bank charge for returned check are not paid within 30 days, suit will be filed to include those amounts plus up to 3 times the amount of the check, but no less than $200 nor more than $1000.

Squeaky wheel… send frequent invoices and/or letters, every 2 weeks, threaten litigation, referral to attorney, attachment and/or garnishment. However, Fair Debt Collections Act has some restrictions, such as no more contact with debtor upon their request for you to stop contact, no harassing calls at work or at home late at night, etc. Your remedy is to refer matter to attorney to simply file suit to collect.