I work in a collection company. If you want more detailed help please let me know.
Firstly: you have to legally secure your payment in case your client makes problems in the future. That means a written contract that specifies what you do, when and when he pays. This should be signed by your Client, clearly in full name and company stamp.
In the contract you include interests for non payment (there are limitations - depends on the country). You should give him bonus for paying on time (eg. 5% off).
Give a short time for complaint - include a clause that if no complaint is officially filed the service is deemed accepted.
Ask the Client to give you a confirmation when he receives your invoice, and when your service is performed/received. Keep track of everyting you do for him and confirm in writing (e-mail is enough) that he accepts it.
Please NEVER trust anyone - I know small family businesses with over $100K of unpaid invoices. Trust is good, but everything changes when you realise you were screwd and did nothing to prevent it.
Practice shows that calling every single day is an efficient motivator. Your Client probably delays payments to others as well, when you bother him a lot you'll be the first he pays to.
Give deadlines and keep them. Ask him always to pay today, not tomorrow, not by the end of the week. Escalate sanctions. If you shoot all your weapons in the beginning, you will have nothing to say to him later. So first tell him that if doesnt pay today, you will remind him every day. Then tell him that he lost his bonus, then that you will charge interests, then that you will stop the service, then that you will contact a debt collection agency/lawyer.
Ask him to make smaller partial payments (could be use in court as a debt acknowledgement.
Be always mentally/financially prepared you'll not receive these payments at all. And act fast, statistics show that succes rate drops dramatically when invoices are older than 6 months.
Thanks! This is good advice. Btw, if I have a written signed contract in place and if the client does not pay and I'm outside US, is it possible to hand over that case to an entity (like collection agency) in US to take care of?
Edit: Also, is there a standar contract template for a vendor/contractor that lays down these conditions in legit manner. For instance, how much interest you can legitimately charge for each day delayed ETC. Just curious.
Yes, it is possible to entrust a company which will take care of that remotely. I believe most international debt collection agencies work this way. It doesn't matter where you are. Let's say you are a French company and you sell to Japan. You don't know Japanese. You go to a big collection firm, you are served in French, but the particular collector is sitting in Tokyo, knows the law there, the language, and finds the debtor and gets the money for you.
Usually there would be a small set-up fee ($50-100) and commission fee for successfully collected moneyes (8-25%, depends on the debtor's country).
Today everything is done on-line, so you don't have to actually be there.
No standard template, sorry ;) Everything depends on the country/state. Btw that's what lawyers are for :) Over here it's 14% a year by the law itself, you don't have to mention it in your contract/agreement, but also you can agree on more/less. However it cannot be 1000%, because it's against the Civil Code. In some countries you can also collect the "collection costs". In some other you cannot. No simple answer.
In the contract you include interests for non payment (there are limitations - depends on the country). You should give him bonus for paying on time (eg. 5% off).
Give a short time for complaint - include a clause that if no complaint is officially filed the service is deemed accepted.
Ask the Client to give you a confirmation when he receives your invoice, and when your service is performed/received. Keep track of everyting you do for him and confirm in writing (e-mail is enough) that he accepts it.
Please NEVER trust anyone - I know small family businesses with over $100K of unpaid invoices. Trust is good, but everything changes when you realise you were screwd and did nothing to prevent it.
Practice shows that calling every single day is an efficient motivator. Your Client probably delays payments to others as well, when you bother him a lot you'll be the first he pays to.
Give deadlines and keep them. Ask him always to pay today, not tomorrow, not by the end of the week. Escalate sanctions. If you shoot all your weapons in the beginning, you will have nothing to say to him later. So first tell him that if doesnt pay today, you will remind him every day. Then tell him that he lost his bonus, then that you will charge interests, then that you will stop the service, then that you will contact a debt collection agency/lawyer.
Ask him to make smaller partial payments (could be use in court as a debt acknowledgement.
Be always mentally/financially prepared you'll not receive these payments at all. And act fast, statistics show that succes rate drops dramatically when invoices are older than 6 months.
Cheers!