Calling past due customers isn't fun and often dreaded by the small business owner. No matter what the business, as long as your provide accounts to your customer, will have customers who fall behind and some that will stop paying all together.

The first thought and consideration when calling a delinquent customer should be protecting your assets. This, after all, is the reason you went into business. Your first initial phone call to the customer should be firm, but not overbearing. Try to find out specifics in the conversation. Get a time frame and amount from them. This you can use later to see whether or not your customer is in fact truthful and whether or not they have intend to make good on their obligation.

If you have to make a second contact because the customer didn't provide faithful, you need to assert yourself in a manner which will back up your intent to recover your asset, if you sold an item on payments, or request legal action. Don't jump the gun but make them aware that if you have to can resort to those measures. Again, probe further information regarding their intent to pay. Verify whether or not they have recently moved or otherwise changed jobs. This might help you should need to bring any matter into a court room.

If you have provided in your contract that if the matter has to be brought to court and you win, you can attach reasonable attorney's fees to the balance that they still owed, make them owe more in the end. You should also inform your customer of this as well. It might make them more motivated to pay you what they owe you before it gets that far.

You should always mail your customer some kind of default notice in the mail. This will give you a heads up on whether or not they moved. In the event paperwork needs to be mailed to them, they will get it and matter won't be held up on court because someone couldn't be served.

A third phone call would come into play if the customer still has not made good. Call them to inform them of what your plans are to do with their file. Give them a last opportunity to pay their balance before it goes to the courtroom.

If you have sold an item on installments, such as a car or household appliance, you can knock on their front door as well. If the item is something that is stored outside you can repossess the item. Make sure that follow the laws regarding repossessions in your state, they vary greatly. If the item is in the house, you can't go in to take the item. You may knock however and try to persuade them to surrender possession.

Attorneys are not difficult to deal with when using them for this purpose. Most attorneys will only charge the cost of filing and a contingency fee of 33%. Any money they receive will come in the form of a check once a month and you just write them the check based on the expenses and fees; which is usually a lot less than the payments that came in.

No matter what situation your find yourself in when you have to collect on a bad debt, know what you are allowed to do by law and follow them closely. Collections and attorney hired for that is not difficult. Sometimes we don't want to seem or feel like a bad guy, but we have to remember why we went in to business to begin with, not to be the good guy who everyone tries to take advantage of. Know what is in your best interest and the best interest in keeping the business performing on a profitable level.

Learn more about this author, Sarah Sanuth - Buying and Selling Cars Steward.
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