If you’re an entrepreneur, you can probably list off the things you love about it, like being your own boss and making deals with clients. You can probably also make a list of things that are less fun, for instance debtors that pay their bills later than they should or not at all. In this article we talk about some steps you can take to make sure debtors pay their bills.
1. Have a signed contract
If you’re able to convince a new client to start working for you, that will give you a thrill. But don’t forget to put everything you’ve discussed in a contract! While verbal contracts are a great sign of trust, they’re not legally binding, so make sure you have all the details written out, especially about the payment terms. Don’t perform any activities without a signed contract, this will only get you in trouble. Even if your mom wants you to do something for an old childhood friend, make sure you have a contract that clearly states your fee and the fixed payment terms. While you don’t want to sue your mom’s old childhood friend, this gives you a leg to stand on if you end up having payment troubles.
2. Ask for a down payment if it’s a big job
If you’re working on a big job that will keep you busy for quite some time, you really rely on getting that money. After all, you have to be able to pay your bills! If you do a lot of work for a client, you can ask for a down payment as a sign of trust. For you, being paid out partially upfront shows that the client intends to pay the full amount when your work is done and won’t switch to a new partner halfway through. On the other hand, if you’re paid a down payment upfront, you’ll work super hard to keep the client happy – something they know!
3. Don’t wait if your invoices aren’t getting paid
If you notice one of your invoices is a few days past the day that it should be paid, you might groan and think ‘not again’. We know it isn’t fun to have to send payment reminders, but don’t wait to take action! If you don’t like a payment reminder by mail, you can for instance start with giving your client a call and asking if something maybe went wrong. Sometimes a bill gets lost or the bank has issues … it’s not always in bad faith! If you can’t reach your client, it’s time to start sending payment reminders and get ready for the next step.
4. The next step: get a debt collection agency to collect the money
At some point, you need to bring out the big guns: a debt collection agency (Dutch: incassobureau). Hiring a debt collection agency (Dutch: incassobureau) has many benefits, such as the fact that they know all the legalities when it comes to debt collection. Furthermore, they have access to things you can’t use as an entrepreneur, think of databases with financial information. Some agencies even work with lawyers, so they can sue you debtor. Curious to know which debt collection agencies there are in your area? Just google them and check out their reviews! If you for instance live in Groningen, googling ‘incassobureau Groningen’ should do the trick.
Good luck with collecting your debts, we hope you’re paid out soon!