Originally Posted By: Johnny2Bad
If you intend to charge interest on past due accounts, be sure to state the terms on every invoice.
Actually charge the interest on past due accounts, and update the invoice to reflect the new amount due.
1, 1.5, 2% per month are reasonable rates. You don't want to go too high because you can run afoul of usury laws in your jurisdiction.
I find phone calls to be less than ideal; mailing invoices is better.
After 90 days past due, escalate your collection process, whatever you decide that may be (small claims; selling the debt at a discount; etc.
If you are normally out and about doing your business activities, knock on doors when it's convenient for you to do so (nearby doing another job, after work, weekends, etc).
Spend some effort collecting, but don't spend *too much* effort; there is no point in wasting many hours on a debt you may not collect. Escalate instead.
Keep track of your collection efforts ... any amount of money you spend collecting (even postage) is also due and payable when you go to small claims court. So if you make a phone call, make a note of the details, and charge 15 minutes of your time as a collection cost (for example).
Although it is true that you can be awarded for your time attempting to collect a debt, the simple fact remains that you can't get blood from a turnip.
A smalls claims judgement in favor of the OP is not a guarantee of payment.
Does the OP think he is the only person this customer has failed to pay?
I have seen this before and eventually the delinquent customer stacks up several debts and collections and files for bankruptcy.
As for telling the neighbors...why? Why introduce your business to other people in such a negative manner? And its none of the neighbors interest anyway, they have their own problems and they are neighbor of that guy 24/7 so they are not going to hurt that relationship to defend you.
Listen, its a rotten deal, it feels like [censored] to get taken advantage of. I get it. But chalk it off and focus on the positive. Every business has to factor in some amount of loss. Its simply the cost of doing business. Figure out how to limit your losses for the future. Maybe a discount for paying in advance or signing a 6-month service contract.
I feel for you. You did good work. You treat people fair and you have a right to expect that in return...but let it go.