How You the contractor will ensure you are paid by your Customer

How You the contractor will ensure you are paid by your Customer

Wednesday, 28 September, 2016

Proven ways that will ensure you get your money. Chasing Debtors is all anyone ever seems to do these days, It appears to become a more regular problem, and sadly everyone unknowingly does business with a deadbeat sooner or later.

Chasing Debtors is all anyone ever seems to do these days, It appears to become a more regular problem, and sadly everyone unknowingly does business with a deadbeat sooner or later. After all, many of them look and act like ordinary, trustworthy people. They should have a big sign on their chest saying ". I specialize in lying and stealing.Watch out. I'm a deadbeat. I like free things. Please sell something to me." When you finally come face-to-face with one of these deadbeat's, what should you do to make sure you're getting the money you're entitled to?. What happens if you don't realize until after you are in the middle or end of the job or until you need to purchase new parts to keep your excavator working?

What should you do? Here are some do's and dont's.

  1. Give the customer lots of options to pay the invoice if possible such as bank transfer, credit card, PayPal, cheque or in the post etc.
  2. Writing a bunch of letters will not help. This doesn't seem to be effective. Calling on the telephone as your main contact tool to speed up the collection process, This will be the best source of contact at the end of the day.
  3. Visit the debtor unannounced and demand payment. If they are not
  4. home, using some tape place a demand letter in a sealed envelope to their front door.
  5. Don't let your lien rights expire. Be aware of the lien right over the supply of goods or services. It is there for your protection. Use it. Be sure to register your customer on the PPSR register before starting works (have the needed customer approval).
  6. Do not make idle threats towards anyone.  Only say what you are going to do and then see that you do it. As soon as they see that you are serious and that you are not going to go away, you may start to see some progress.
  7. Don't procrastinate. once your invoice hits 180 days your chances to get your money are about 50%. Statistics show that the longer you allow this to go on, the chances of you receiving your money will be very low.
  8. If the debt is $3,000.00 or less, Don't be afraid to use the Small Claims Court to bring suit. The Small Claims Court cases usually only cost about $50.00 and are quite quick and easy.
  9. If you are not making progress you can always hire a professional debt collector. If the Invoices are 90 or 120 days past terms they than become strong candidates for the debt to a collection agency to take over.

The longer you have been in the business, the more prone to some collections problems you will be. But you can limit your losses and reduce your risks if you choose to implement the suggestions I have listed above.

An independent contractor usually submit's the invoice when they expect to receive their payment. They can be paid on a regular basis or at the end of a contract or project, of course, that is when the problems start After the job has been completed, and the customer gets the result he was after. At the end of the day it is your money and no matter wether you need a new excavator or new rubber tracks, you do need to get paid.

"Collecting money isn't fun, but you can be assertive without being threatening, and civil without being ineffective. It's your money, so there is no reason to feel reluctant about using bold tactics to collect it. And not having to write off losses from bad debts can make a significant impact on your balance sheet."
-George D. Prentice