I'm working with a client who is currently delinquent two months on a recurring service we offer. We've tried reaching said client several times now via phone, mail, e-mail, ect to no avail. The clients are out of state and there has been some issues in the past with payment delinquency but never to this extent. How do you typically handle this situation with your business and when do you typically stop trying to reach the client and cease services?

The main goal here is to just receive payment and continue on with said services and relationship but at some point you have to draw the line in a tactful way to prevent future delinquency. Unfortunately, that is a very fine line which I'm having some trouble deciding how to proceed from here. We have a contract in place which states there can be fees added but we've never done so out of good will in trying to maintain a friendly business relationship with client. Also in order to end contract requires 30 days notice from either party.

9/7/2011 10:26:26 PM

At the last place I worked that had a monthly service, they cut off service the day after payment was late. Definitely helped get the money in ASAP when they went into their software and it was flashing a big "Deadbeat pay us" sign

Place before that if you were 30 days delinquent they'd just send you to collections.

9/7/2011 10:29:32 PM

Foreclosure

9/7/2011 10:34:08 PM

at the last place I worked that was similar to your situation:

-payments due on the 1st
-if not received on the first, the account was put on hold and they did not have access to services until they paid for the full month
-after three months of no payment, the account was terminated and sent to collections

9/7/2011 10:50:17 PM

Send to collections. That's what the MD's my company deals with does.

9/7/2011 10:57:36 PM

1. stop service
2. don't expect to receive any money.
3. if client wants service back, charge him late fee + reinstate fee.


How much money are we talking?
What service?
How much information do you have on file?


If you want to take aggresive action, you have to be able to notify him a couple of time using certified mail w/ signature. Then you can take him to court. It's a lot of work and I wouldn't recommend it if the value is under $5000.

9/7/2011 11:43:36 PM

9/7/2011 11:57:11 PM

DTMFA

9/8/2011 12:55:42 AM

Depends on the amount. An expensive law firm letter head is normally enough to curb this, and guarantee future timely payment, but the service we offer sounds to be different in nature and price.

9/8/2011 3:25:50 AM

I usually hound the fuck out of them until they pay. Most of the clients I have that stop paying have stopped using the product (online software) without formally cancelling the contract so stopping their service does nothing. If they get ugly or become non-responsive, then we basically write them off because the amount we can get from collections is not enough to make it worth it with our small monthly charge.

9/8/2011 6:22:10 AM

What percentage does collections usually take?

9/8/2011 8:21:20 AM

Well, the way our contracts work is that we would sell a bundle of our delinquent accounts for pennies on the dollar to a collection company. What they get from the client is up to them.

9/8/2011 8:33:42 AM

9/8/2011 9:52:36 AM

sounds like you have to send it to collections

9/8/2011 11:00:12 AM

Screw collections. Go to small claims.

9/8/2011 1:17:35 PM

depends on the amount of money owed. we have a lot of clients that have been with us for decades, so we try to be understanding of their paperwork battles for getting paid. If it's a new client and we've gone 90+ days with the runaround, we take them to court.

9/8/2011 1:34:28 PM