Collect your debts: what are the options?
16:01 BST, May 28, 2020
7 Effective Ways to Make Your Industrial Business More Sustainable in 2020
17:44 BST, May 28, 2020If you work as a freelancer, the following probably sounds familiar. You have completed an assignment for a client, but you don’t get paid. There is nothing more annoying than having to wait for the debtor to pay up, but how do you prevent this? How do you ensure that the debtor pays you in time? We give you 5 tips!
Freepik.com image adapted by Market Business News.
Make clear arrangements
It may sound simple, but it’s important to make clear agreements with your client. Even if the client’s payment reputation is good, it’s important to write certain things down. Specify what your work will be exactly, what the rate is, which payment term you have set and when you will send the invoice. If something goes wrong, you will have fixed agreements that you can rely on.
Get a signed contract
Are you going to work for a new client? Then it may be wise to have the contract signed. Especially if you know nothing about the payment reputation of your new client. If you have the contract signed, there is simply less room for misunderstanding.
Ask for a down payment
With a down payment, mutual trust is expressed and it ensures a certain amount of commitment. Not only for you, but also for your client. You can assume that your client doesn’t switch to another expert and that you will be paid for your work. And with the down payment, your client can assume that you keep time available for the assignment.
That’s especially great for assignments that take a longer period of time. And of course, very important: with a down payment you receive your money at different moments. This way you will not run into financial problems if the payment of the invoice takes longer.
Take action on time
Has the payment term expired? Then get in touch with your client. It’s important that you don’t let too much time pass. You can send a written payment reminder after a few days. Are you not getting a response? Then it is wise to call your client. Personal contact is often the most effective.
Get help from a Debt Collection Agency
If the debtor refuses to pay or you can’t get in touch with the debtor, you can hire a debt collection agency (like nl in The Netherlands). This may seem like a big step, but sometimes calling in a collection agency is the only way to get the money you are entitled to. Make sure you use a reliable collection agency, because there are a lot of rogue collection agencies.
Interesting related article: “What is a Bad Debt?“