Overdue Payment Collections Procedure
Question
What happens if I do not pay my bill on time?
Answer
If a client fails to make payment within the terms of the contract (usually 30 days), and the payment is verified as overdue we will follow a standard collections procedure that we apply fairly to all clients.
It is the client's obligation to understand their contract, and we make reasonable efforts to ensure they understand our terms of payment when they first sign the contract. If clients understand our strict terms they will not feel taken advantage of. These strict policies have been adopted because too many good clients ignored our invoices, and some bad clients simply refused to pay.
We are a very reasonable, honest and fair company that will do whatever we can to please our clients. Communication on the part of the client is essential for us to assist the client with any problems or complaints they may have. But this communication must happen as the project progresses and before the final due date of the invoice. Unfortunately, we have found that many clients simply cannot communicate. Whether because they are too busy or they simply do not have good communication skills, the end result is that their projects fail to progress or worse, we have to terminate our business relationship with them because we cannot perform our duties without their active involvment.
When it comes to payment, we cannot allow clients to ignore our bills. If a client has a genuine complaint against us, they have 30 days to communicate with us and we will do everything we reasonably can to resolve the problem. If a client cannot pay for some reason, we are also willing to discuss payment options. But if a client simply ignores our invoices and doesn't communicate with us for 30 days after the invoice is sent, this is not acceptable business practice and no business will allow clients to disregard their bills.
Documentation:
We document all interaction between us and clients from the first contact through the collections procedure, so that we have a complete record of everything that was communicated.
Finance Charges:
Finance charges are added to the account when it becomes overdue.
Credit Card Payment:
We will attempt to charge the client's credit card for the outstanding debt, as outlined and agreed upon in our contract. A 3% processing fee will be added to the total cost to cover the transaction fee. If credit card payment fails, further action will be taken. If a credit is charged successfully, an email will be sent to the client.
First Reminder:
If automated credit card payment fails, we will send an email to the client reminding them that their payment is overdue and must be paid within ten (10) days.
Followup Call:
If a client has not responded within five (5) days, we will give them a call and summarize the situation, requiring payment within five (5) days.
Final Warning:
If the first reminder and the followup call does not result in successful collection of outstanding debt by the due dates set, we will send a final warning letter requiring Client to pay their debt in full within ten (10) business days, or the business relationship will be terminated and further legal actions will be taken to recover the debt.
Send to Collections:
If payment is not received after 30 days overdue, and client has not communicated with us or attempted to find a fair and reasonable solution to their complaints, we will refer the account to a local collection agency.
