Wednesday, July 21, 2010
According to Emily Maltby (WSJ, July 15, 2010), a third of business owners say customers are stalling on payments (this was a quarter in 2008).
One business owner started adding a late fee at 45 days and again at 90 days. Customers noticed and called on “the day” and said, “I am sending it, don’t charge me.”
This same woman started using a distributor instead of dealing with each shop.
New customers also fill out a credit app now, too.
She asks customers to leave a credit card number in case a payment is late.
You could also use a factor for larger sales—basically the factor pays you for the debt, then collects it and keeps the money. They also assume the risk, obviously, and you pay a percentage for this.
Small claims is an option, too—I have been twice and urge you to sue only if it’s for the full amount allowed. The process is long, tiresome, and you have to collect somehow if you win.
The leg breakers also charge. (Kidding, kidding.)