Of course, you expect payment for labor, commodities, or services when you conduct business with your clients or customers. But what happens if the company’s payments are late or unpaid? Worse, they might not show up at all! There are actions you can take to deal with consumers who don’t pay bills or unpaid invoices, along with the debt collection in UAE, but let’s start with how you may prevent non-payments from clients.
Keeping non-payments at bay
Chasing a nonpaying customer can be difficult, which is why it is always preferable if the problem can be avoided entirely by following these guidelines:
Look into the client
If you’ve never worked with or done business with a client before, you’ll need to conduct research to figure out exactly who you’re dealing with. Simply Google the client’s name and ask your contacts if they know anything about the client, who is now your new prospect. You can also determine if the client has been the subject of a complaint.
Remember that the majority of unpaid payments can be avoided by conducting pre-screening of consumers. You’ll be able to conduct your risk assessments using the information available on the internet, including notices of liens, court records, and other information. The likelihood of a client failing to pay must be proportional to the company’s risk tolerance.
Obtain a written contract or agreement.
There must always be a contract or agreement in place, whether it is with your best buddy or a known business mogul in the sector. A contract must address legal issues such as the following:
- Schedule of payments (examples: 40 percent as deposit, another 40 for milestone payment, then 20 for completion)
- Both parties’ preferred forms of payment, such as credit cards, checks, or direct deposits
- The project’s or work’s scope
- The deadline, or the anticipated completion date
- The amount charged when an invoice is not paid on time or according to the terms agreed upon by the parties
You must get all of the information and put it in writing so that you don’t run into any problems later. If a consumer is aware that he or she owes fees for an overdue bill, for example, he or she is less likely to default on payment. If this occurs, the customer is obligated to pay interest. Nothing is certain or guaranteed if you fail to establish an agreement.
Inquire about a deposit from the customer
You will take a blow if you ask the client for a percentage of the payment as a deposit. When independent freelancers are negotiating with their clients, they frequently want a retainer or deposit. This can assist in recouping part of the time and money invested in initiatives.
The amount you should ask will be determined by the industry you work in. If a professional in your position does not demand a retainer, consider a fee that is paid in installments, with only a portion of the project remaining unfinished. This way, you’re less likely to complete a lot of work before getting paid, only to find out that you won’t get paid at all.
How to Approach a Client Who bill is unpaid?
Even if your company has done everything possible to avoid a problem, you may still have consumers who refuse to pay. If you’ve taken all of the safeguards and your clients are still not paying their bills, here’s how you should handle the situation:
- Consider your options and decide whether the cost of pursuing this particular client is worthwhile. It may be easier to just let go of an overdue that is only a small percentage of the business’s income than to keep track of this specific client as a business for the future. What you don’t want to do is waste more of your company’s time and resources on an invoice that isn’t worth anything.
- Hire a debt collection firm – debt collection in the United Arab Emirates is made easier with the help of third parties. A firm with experienced debt collectors, particularly those situated in Dubai and Abu Dhabi, will contact debtors via phone calls and letters in an attempt to get them to pay your company what it owes. When a debt collection firm in the UAE is unable to contact a debtor using the contact information provided, they turn to private detectives and computer software for help.
You don’t have to quit up on unpaid invoices and debts completely. To learn more about debt collection in Dubai, UAE, contact DDR-selected Lawyers.