Five Steps To Ensure Your Business Gets Paid
Collecting accounts can be a hassle in good times, but in difficult financial times (like now) when every dollar counts it can be tougher.
- The first step to avoiding late payments is to set a standard payment policy with clear terms.
- Then, make sure your customers are aware of the policy before the work is started.
- Print the policy clearly on all paperwork (estimates and invoices) and be sure to include any fees associated with late payments.
- If you use service contracts (and you should) consider adding an attorney’s fees clause to your agreements which compels the court to award you attorney’s fees and reasonable court costs if you have to sue to collect.
- Venue clauses—if you provide services or goods to a company in a different state you will want to have a clause that states that the laws of California govern your contract and that the parties agree that any dispute over the agreement will be heard in a California court. This last point is critical. You may have a good case to prosecute for breach of contract, but if you are forced to do it in New York for instance the costs may be prohibitive. It’s even worse for you if you are sued out of state by a party with whom you have done business, so ensuring legal problems are resolved in California is very important.
Want to write your own contracts with customers? Read this article on 10 things every business agreement must contain.