You are here:

Business Debt/Collection of Past Due Account

Advertisement

Expert: - 3/1/2011


Question
My husband is a small home-based business owner working in turf equipment repair.  He operates this business as "side-work" in addition to his full-time employment with another company. Currently, he has a customer who refuses to pay a $350.00 bill for work done in mid-December.  My husband's policy, as stated on his invoices, is payment at time of delivery.  Along with that statement of "payment required at time of deliver" is also a statement that interest will be assessed after 30 days if payment is not made at time of delivery.  It is my husband's practice to always have an agent for the customer sign off on this and sign off on the delivery of the serviced/repaired equipment as part of the invoice. We have a dated signature of an agent for this specific customer showing the date the serviced and repaired equipment was returned.  However, after contacting the customer several times, and several promises from him for payment, he still has failed to pay.  What recourse does my husband have to enforce payment in this matter?  And, by stating payment policy and requiring signature, is he doing everything correctly on his invoices to document agreement with his payment policy ensure payment by other customers?

Answer
Rhonda,

His first step is to find out why or what the reason is the customer is "refusing" to pay the $350.00 bill.  Is the person who is refusing the same person who signed the contract or agreement?  

Since the customer has made payment promises to you without any indication of a dispute and then suddenly decides to refuse to pay you may be able to either place them with a collection agency or take them to small claims court yourself.  You will be successful with either of these avenues as long as you have all the documents to support the debt.  This would include the signed contract or agreement, the signed credit application, any invoices or bills and/or a proof of delivery if applicable.

Yes, as long as the customer is made aware of and acknowledges (by a signature) that they have read and understand your payment policies BEFORE the sale is made, you are within your legal rights.  

Without a valid dispute or concern, and after making payment promises without bringing any disputes to your attention, you should be fine either in court or with an agency.

Business Debt

All Answers

Answers by Expert:

Ask Experts

Volunteer

Michelle Dunn

Expertise

As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.

Experience

I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com

Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.

Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.

Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.

Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.

©2012 About.com, a part of The New York Times Company. All rights reserved.