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    Maybe you need a Business Divorce

     

    By Lori J. Frank              

    We are taught that all that matters is the sales to your customer. If you can just sell enough product or services then you will be rolling in the dollars. This is true, IF and only if, the customer is paying you! If not, all you are doing is laying out cash to your employees and your suppliers. Most business is conducted by a handshake (either actual or electronic) and rarely is there a written contract. We mostly trust that we will get paid for our product or services.

    Let’s say you and your customer have done business together for a period of time. At first you were getting paid as agreed, and maybe a little early. As time went on, you started to notice that the customer is not paying you as in days past. You call and ask the owner why it is taking longer to get paid than it had been. You are told, “Well we are in Michigan and my customers are taking longer to pay me”.  Is that the truth or is my customer using the bad economy as an excuse? It doesn’t matter. In either case, you should start by asking your customer for Cash On Delivery and talk to the customer about an arrangement to pay the past due invoices. Most good customers will be embarrassed but will talk to you about making good on the debt. If your customer won’t discuss a concrete plan to pay the past due invoices, then it may be time to get the divorce and cut that customer loose. Furthermore, if the checks from your customer start to resemble a basketball and bounce, then time is running out on getting paid.  This is a red flag and all deliveries should stop unless payment is guaranteed either by bank check or by a credit card.

    Lori J. Frank is a contributing member to the Talan education blog series. LJ Frank PC was formed in 1996 and the firm specializes in the collection of debt. They can be found at www.collectionlaw-firm.com. LJ Frank PC is located in Southfield but covers the entire State of Michigan. LJ Frank PC is a member of:

    Michigan Bar Association

    Oakland County Bar Association                     

    Michigan Creditors Bar Association

    Commercial Law League of America

    If your business is in a situation where your cash flow is being negatively affected by clients who are not paying as they should, contact Talan today to discuss your options for reducing your exposure to this unnecessary risk.

    About the author

    TalanSBS wrote 11 articles on this blog.

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