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non payment
December 22, 2010
1:37 am
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Dean
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December 21, 2010
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Hey guys. Great site dedicated to the Courier market.

I’ve 150 potential customers mapped out. The distribution business that these customers use allow for any type of service to pick up and deliver goods to their customer. (that’s where my superior service will take over).

My question is What do you do when customers don’t pay? Say for example, it’s been 30 days since payment, but you have serviced the account once or twice each week leading up to the full month. At what point do you stop delivering and start pressing for payment?

Thanks

December 22, 2010
1:38 am
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Sam Knowlton
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February 20, 2010
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Dean,

Thanks for your question. I have another: Is this a problem you have experienced, or a problem you are anticipating?

If the latter, I wouldn’t let this concern hold you back. If your potential clients are businesses (as they should be!), non-payment is extremely rare. If the business is reputable and has been around for a while, they are clearly able to meet their obligations. Additionally, if you are billing monthly, your maximum liability would be pretty small.

If you approach your business professionally and project professionalism to your clients, they should treat you with the same respect — and that includes paying you on time.

Realize that many businesses expect "net 10" or "net 30" terms, meaning that they expect to have 10 to 30 days to issue payment from the date you submit an invoice, which is not unusual. The bottom line is that so long as you negotiate arrangements that are satisfactory to you, you can set up any arrangements you like. The key there is to make sure you have these arrangements made UP FRONT, so there are no surprises.

Finally, if you are actually experiencing non-payment, you can typically write off the unpaid revenue as a business expense. Unless it is a rather large sum, I would simply refuse to complete additional deliveries after a reasonable grace period and move on with my life. I likely wouldn’t perceive the time and expense involved in pursuing bad debt worthwhile — but that’s me. You’d really need to talk to a lawyer and an accountant to discuss your options and know the potential outcomes.

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