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When Clients Go Wrong
Clients not paying you? You win no points for being the nice guy.
 
Here
ʼ
s why.People want to work with a professional.
 
Someone who is serious about his/her skill and who will not bedeferred from delivering on time, on budget, etc..
 
Would you pay $25,000 for a car which stopped workingat 15,000 miles? Would you accept a carpenter who builds 80% of your deck and then leaves for the next job?
 
Of course not.
 
People want professionals.
 
They want credible professionals.
 
What if your are the car dealer and your client stops paying?
 
Or the carpenter who gets only the deposit asthe client has refused to pay the balance?
 
You have to engage them quickly.Makes no difference how critical or vital a client may be to your business.
 
If they have stopped paying,refused to pay, or make excuses, you must engage them early to retain your credibility and that of yourcompany.
 
Do you want others thinking your contracts have no teeth?
 
You get the idea.What to do?
 
When clients go wrong, here are my suggestions:
Preventative Maintenance:
.1.Cite clearly what will happen when payment is not received such as (for example) three grace days,then a letter, then 10% interest applied for 5 days and then the account will be closed and turnedover to a collection agency.
 
Build this into your agreements..2.Build in heavy penalty clauses into your agreements such as paying collection fees, etc; if theyknow they will have to pay collection fees (up to 50% in some cases of what is owed) plus theamount due, that may compel them to not miss a payment..3.Interview and retain a collections firm in each county you do business/have business.
 
When youneed to pull the trigger, you have the team already in place to engage and get results.
 
.4.Stay current with your invoicing and regular written client communications.
 
You don
ʼ
t want theclient saying “We never received an invoice” or “We haven
ʼ
t heard from them.”
The Personal Side
“But Mark, I have been doing business with them for 5 years!
 
I just can
ʼ
t turn them over to collections.
 
It
ʼ
s
personal.” 
I hear you.
 
And because it
ʼ
s personal you have written the client, been patient, offered flex payments,extended terms, offered to accept a lower monthly, etc..
 
But then, if you still have not received payment after all that, you need to step it up.
 
Not doing so will sendthe message, “We don
ʼ
t have to pay her.”
 
And that
ʼ
s a bad message to send in any economy.
 
If yourclients talk to each other, it gets even worse.
 
If you are not willing to engage in collections at some point, Ihave to ask if you are running a business or just enjoying a hobby.
 
Of course, many business owners do not want to sour relationships with what has otherwise been a goodclient and good relationship.
 
I agree.
 
But I
ʼ
m not talking about a client who has fallen on tough times, nowhas low sales and is willing to make arrangements.
 
I
ʼ
m talking about those clients who refuse to engageyou, refuse to admit they owe you or refuse to pay you anything while business is slow.
 
Also keep inmind, if you are a b2b, and
 
if some of your client's business dies, you will be in potentially a very long lineof collectors, so the sooner you get started, the better.I
ʼ
ve heard so many excuses from business over the years (both some of my clients and my clients
ʼ
 
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