In today's Freedom Friday blog and email newsletter, I want to pick up where we left off in last week's Freedom Friday blog and email newsletter.  Last week, I answered the question, “How can a small business resolve non-payment invoices?”  I talked about some strategies to effectively resolve accounts receivables and collections issues, and discussed some practical steps you can take as a small business owner, including sending a final invoice, consulting with an attorney, and making a business decision whether to file a lawsuit to recover the unpaid invoices, and what type of lawsuit to file, i.e., a small claims case or a civil lawsuit.  I want to take a step back from this today and talk about how to avoid getting into commercial collection problems to begin with.  In today's Freedom Friday blog and email newsletter, I'm answering the question, “How can a small business avoid commercial collection problems?”

Here are four (4) practical steps you can take as a small business owner to avoid commercial collection problems:

1.  Keep Good Records

The first step you can take as a small business owner to avoid commercial collection problems is to keep good records.  If you can't find contracts, confirmations of delivery, and/or other important documents, you're going to struggle with debt collection issues and customers not paying their invoices.  Poor recordkeeping can result in significant losses of income.  You need to have enough staff, equipment, and internal procedures to keep good records.

2.  Have a Debt Collection Policy

The second step you can take as a small business owner is to have a debt collection policy.  A very common barrier to effectively get unpaid invoices paid is not having a clear credit and/or collections policy stated on each invoice you send to a customer.  Once you create the policy, make sure you enforce the policy with your customers.

3.  Respond Immediately to Late Payments

The third step you can take as a small business owner is to respond immediately to late payments.  It's very common for small businesses to ignore accounts receivable and avoid issuing final demands for payment until several months later.  Unfortunately, the older the account, the less likely the account will be paid in full.  It is best practice to send an account to collections once it is 60 to 90 days past due.

4.  Get a Good Business Attorney

The fourth step you can take as a small business owner is to get a good business attorney to assist you in your commercial collection issues.  Don't ignore unpaid accounts and hope you'll eventually receive payment.  If the due date has passed, you have tried calling and emailing the customer several times, and you still have not received payment, then it is time to hire a good business attorney to help you.  Your business lawyer will have many tools to help you recover delinquent payments from customers on your behalf.  Working with a good business attorney will be one of the most effective ways to recover what your small business is owed.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/