I have just started a new retail shop and I am having to get my head around my legal responsibilities. There is a lot to consider when you are employing people as well as having customers and suppliers interacting with your business every day. We are a successful business and part of staying successful is making sure that the business is set up correctly and that we look after everyone involved legally. This blog has tips for new retail store owners to help them understand what legal issues they can manage themselves and when it's time to get advice from a lawyer.
As a business owner or manager, one of the most frustrating experiences is when a customer owes you money and doesn't pay. When you have tried everything in your power to collect the debt, it can be tempting to just hand the case over to a collection agency and forget about it. But before you resort to that, there are a few things you can do to try to collect the debt on your own. What should you consider?
Send Reminder Notices and Make Phone Calls
The first thing you can do to try to collect the debt is to send reminder notices and make phone calls to the customer. You should first send a friendly reminder notice or email reminding them of the invoice and asking politely for payment. If that doesn't work, make a phone call and ask the customer why they haven't paid the invoice yet. Sometimes, the customer just needs a gentle nudge to remember to pay.
Offer a Payment Plan
If the customer is struggling to pay the entire amount all at once, it might be worth offering a payment plan spread over a given number of months until the debt is paid off. Make sure to get the payment plan in writing so that there is a clear agreement.
Negotiate a Settlement
If the customer is still struggling to pay even with a payment plan, you might want to consider negotiating a settlement. This means that you agree to accept a smaller amount than what is owed. It may be worth getting something rather than nothing at all, but make sure to get the settlement agreement in writing and signed by both parties.
Threaten Legal Action
If all else fails, you might need to threaten legal action. This might be enough to get the customer to pay the debt. Make sure to consult with a lawyer before threatening legal action to make sure that you have a strong case.
Hand Everything to a Collection Agency
If none of the above options works, it might be time to hand the case over to a collection agency. While there may be an expense involved, they are often effective in getting customers to pay.
What to Remember
In conclusion, collecting a debt can be a frustrating experience, but there are steps you can take before handing the case over to a collection agency. Sending reminder notices, offering a payment plan, negotiating a settlement and threatening legal action are all options you should consider before you bring in the experts. However, if none of these options works, a collection agency might be your best bet to collect the debt, and if you reach that position, get in touch with some experts to help you out.
For more information, contact a local debt collector.
Share8 May 2023
