Getting paid can sometimes take longer than expected. But, how long? That depends on whether your client has a deep pocket. And also how long they want to stretch out and avoid payment.
Consider this: A contingency fee is the most common way to handle claims. When there appears to be a possibility of collection, your collection attorney will continue to work on the case until you receive payment.
The same does not hold true for your nonpaying customer. Unless your client is an attorney and will self-represent or has a friend who is a lawyer or one on staff, the corporation you sue for nonpayment must hire counsel to represent them. They cannot represent themselves.
The non-paying customer will have to pay for representation.
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As you look at your receivables, you ask yourself, how collectible is this debt? Every business owner understands cash and cash flow, so collecting a debt or dealing with slow payers becomes a part of doing business. Since the dawn of the simplest commerce in human communities, debt collection has been an integral part of business in any society at any time in human history.
Debt collection is eventually an unfortunate byproduct of most commercial transactions. Extend credit to a customer for their purchase of goods or services, and they’re now in your debt. While most customers pay within the set terms, sometimes customers will be late, or they may even default entirely.
What happens when a client wants to pay an outstanding balance from their future sales or services? Working with that customer had previously been profitable, but they’ve experienced cash flow issues. For those who wish to continue doing business with a customer who seems to be having difficulties, you need to know how to best position yourself to obtain payment on the aged balance as well as any future sales.