Being an entrepreneur can be super exciting. The thrill of signing a big contract or selling something expensive is one like no other. Yet there are downsides: the annoyance when you notice a debtor hasn’t paid a bill is also one like no other. No business goes bankrupt from a small unpaid invoice, but when we’re talking about multiple invoices of hundreds or thousands of dollars… it can get super frustrating. In this article we talk about ways you can make sure your debtors always pay their bills.
Make Sure Your Invoices And Arrangements Are Air-Tight
Everyone in business can tell you you need all your agreements in writing. While your clients might agree to something, it’s important to have cold hard proof in case something goes wrong.
We recommend you to consult a lawyer if you’re just starting your business or want to change your agreements and/or invoices. Make sure they’re air-tight and there are no accidental loopholes. Also make sure your invoices show all the legal invoice requirements, such as an unique invoice number, company name and description of the goods or services. If you don’t want to make your own, you can also work with invoicing programs that let you make adjustments to templates.
Contact Debtors Straight Away When You Notice Unpaid Invoices
As an entrepreneur, it’s important that all your invoices get paid. After all, you also have bills to pay: your rent, your electricity… you don’t want to get into trouble yourself!
That’s why it’s important to check your financials often or work with an invoicing program that flags these unpaid invoices straight away. We recommend you to contact your client as soon as possible. If you have a good working relationship with them, call them and explain that you’ve noticed this issue. While we as humans often tend to jump to the worst possible explanation, it’s sometimes just a mistake. Maybe something went wrong in the accounting department, there was an issue with the bank ….
If you handle many small clients, it might take too much time to call them all personally. You can also issue a 7-day payment request containing details of your original agreement. Mention that you will take them to court and fail a claim if they don’t pay up within those 7 days.
Hire A Collection Agency
If it’s only one debtor you’ve got to harass, you can easily do that yourself. But if it’s multiple or if it’s a debtor you can’t reach, you need help. Luckily, there are collection agencies (Dutch: incassobureau). Hiring a collection agency (Dutch: incassobureau inschakelen) saves you a lot of trouble.
They know exactly how to find who owns a business exactly and can even hire a bailiff to seize assets. They can even help you take your debtor to court. It all depends on the case - and you can be sure they’ve done this before.
We recommend you to look at the Google Reviews of the collection agencies in your area and ask fellow entrepreneurs if they recommend an agency. When going in for your introduction meeting, don’t forget to ask what their payment plan is. “No cure, no pay” is very handy, because then you only pay if the agency succeeds in getting your debtor to pay. While it doesn’t happen often, you don’t want to pay your agency if they’ve been unsuccessful!
Good luck - we hope your invoices are always paid in time!