collections | The Law Office of Wesley Scott Jones, P.C.

As a Wilmington attorney for a variety of business owners and operators throughout southeastern N.C., Wesley Scott Jones has handled numerous disputes over past due notices.

For over-burdened business owners, handling past-due accounts can be a thankless, time-consuming task. That’s why so many firms choose to take action only when receivables are 90 days or more past due. This tactic may result in limiting your cash flow and profits.

In an effort to assist the parties involved before it becomes a legal issue, Wes has a few suggestions:

Stay on top of unpaid receivables and create a safety net in the form of a tighter credit policy.
Set up an accounts receivable aging report so you’ll be able to recognize non-payment patterns before thy get out of control.
AllBusiness.com reports that, “Studies reveal that the likelihood of collecting receivables drops drastically as time goes on-from more than 90 percent after 30 days to 74 percent after 90 days and just 50 percent after six months.” With that in mind, establish a policy that any customer 35 days past due, will receive a friendly phone call as a reminder.
Since missed payments can and do happen, consider working out a specific deal with a customer who’s honestly had a cash flow issue. Establish a realistic payment schedule and identify a pay-off goal day. Have it legally drafted and both parties must sign in front of witnesses. Only do this for very special cases.
Follow up courtesy calls by mailing past-due notices and letters by regular mail – not e-mail! Sometimes a little humor can go a long way, such as a postcard with an appropriate graphic and a message like, “Please pay your bill so I can pay mine.” Always include a phone number in case the customer needs to explain his or her situation.

If 90 days or more have passed and you still have not received payment, it’s time to contact the office of Wesley Scott Jones: 910-256-5800. Let Wes help you recoup past due accounts in a legal manner that will deliver results.

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Collection of Past Due Accounts

As a business operator, one of the challenges is how to handle customers who fail to pay for goods or services in a timely manner. As most savvy business owners are aware, it is a common practice for outstanding invoices to go unpaid for up to three months. It has been determined through several studies that bills delinquent by 3 months are ultimately paid off by the customer on an average of 75 percent. However, receivables that go unpaid for 6 months or more are less likely to be paid up in full. When collecting on past-due accounts, time is of the essence.

With that in mind, Wilmington Business Attorney Wesley Scott Jones has a few suggestions for alleviating the hassles and stress that collecting on past-due accounts can cause.

Give customers who pay their bills early an incentive, such as a small discount of 2 or 3 percent. For example, a 2 percent discount for a service that cost the customer $2500 would net them a $50 discount if they paid it off in 10 days rather than 30.
Be aware that most people receive their tax refunds within 20 days after filing. That means many of your customers may have extra cash to settle up with you starting in May and early June.
Establish a policy that charges extra when a bill remains unpaid after 30 days. Attorney Wes Jones can counsel you regarding the NC policies regarding usury statutes and federal regulations so you will not overstep any legal boundaries.
Make courtesy calls to delinquent customers. This is not a threat tactic, but a simple check-in to make sure that they were happy with the goods or services and that there are no extenuating circumstances preventing them from paying.
If it is obvious that the customer is simply trying to duck out of compensating you, appeal to their conscience. For example, you could gently remind them that you also have bills to pay and their failure to take care of this obligation is further complicating your financial situation.
When all else fails, employ a third party to make a phone call or personal visit regarding the nonpayment. Ideally, this individual would be on the firm, no-nonsense side and remind the customer that legal action may be the next step.
When these methods are unsuccessful, the next move should be in the form of a written request.

The carefully worded letter should open with an acknowledgement from you stating that you appreciate their business and hope that they have been pleased as a customer. Ask them to please excuse this request if payment has already been made. Then, gently explain that if no payment has been submitted, their account is past due. Be sure to include the amount and the date it was due. At this time ask if they plan and/or are able to pay the amount in full or would a partial payment be more suitable at this time? The logic here is to offer them a way to begin settling this issue in a more manageable way.

Next ask them to please notify you immediately if there is a reasonable explanation for their delinquency. Be sure to include all of your contact information, including a cell phone number and e-mail address. Then let them know that by a certain date, you will have no other choice than to turn the matter over to a collection attorney or take it to small claims court.

Reiterate to the customer that you deeply regret mentioning these choices, however, you feel that you have given them an ample amount of time to pay the invoice.

*Of course make copies of all the communications initiated by you and received by the customer, including e-mails and phone messages. From a legal standpoint, such hard copy documentation is valuable evidence.

If your company is having difficulties with past due accounts, why not meet with Attorney Wes Scott Jones? As an experienced business law attorney, Wes can discuss your concerns and guide you to the strategies that are right for your individual situation.

To contact the office of Wesley Scott Jones directly, please call 910-256-5800.