When you’re doing business with your clients or customers, of course, you expect payment for labor, goods, or services. But, what happens when payments for the business are late? Worse, they may not come at all! There are steps for you to follow in order to deal with customers that aren’t paying bills or invoices and for debt collection in UAE, but let us first look at how you’ll be able to prevent non-payments from customers.
Preventing non-payments
Chasing a customer that does not pay can be tricky, which is why it is always best if the issue can be avoided altogether by taking these precautions:
Research the client
If you have never worked or done business with a certain client before, then you have to take the time in doing some research in order to find out who you are dealing with exactly. Simply Google the name of the client, and ask contacts if they’re aware of anything regarding the client, which is your new prospect. You can also see if there’s a complaint against the client.
Remember that most payments that are not settled are possible to prevent through the screening of customers in advance. Thanks to the information that is available for us to access over the internet, most especially notice of liens, court records, and more, you’ll be able to run your own risk assessments. The possibility of a client not pays has to be reflective of the tolerance of the business for risk.
Secure a contract or agreement in writing
Regardless of whether it is your closest friend or a respected business mogul within the industry, there always has to be a contract or agreement written in place. An agreement has to address legal concerns, such as the following:
- Payment schedule (examples: 40% as deposit, another 40 for milestone payment, then 20 for completion)
- The preferred method for the payment of both parties e.g. credit card, cheques, direct deposits
- The scope of the project or work (exact work that is expected to be completed)
- The deadline or the expected date of completion
- The policy for late payments – the amount charged when an invoice does not get settled on time or as agreed by parties
It is essential or you to get all the details and place them in a contract so there won’t be any issues you’ll face down the road. If your customer, for instance, knows that he or she owes fees for an expense that’s overdue, then he or she will less likely not pay. If it actually happens, the client is forced in paying an interest. If you fail in setting up an agreement, then nothing is for sure or guaranteed.
Ask the client for a deposit
If you ask the client of a portion for the payment as a deposit, then you will absorb some hit. A retainer or deposit is usually asked by independent freelancers when they are in negotiations with their clients. This can help cover some of the time or expense that has been placed into projects.
The amount that you should ask will depend on the industry that you belong to. If a professional in your position does not charge a retainer, then consider a fee that is on an installment basis, only paid as soon as you complete a portion of the entire project. This way, you’re less likely to do a lot of work prior to being paid then realizing you won’t be paid at all.
How to approach a non-paying client
Sometimes, regardless of what your business has done in order to prevent an issue, you are still left with customers who don’t pay. If you have the precautions and clients still don’t settle invoices, then here is how you should approach your situation:
- Weigh your choices – ask yourself if the business chasing down this particular client is worth the effort. For an overdue that is only just a tiny percent of the business’ income, it may be better to just let go then note this specific client as a business for the future. What you don’t want is spending more energy and valuable resources of the business on an invoice that does not worth much.
- Hire an agency for debt collection – debt collection in UAE is made easier with the help of third parties. A firm with seasoned debt collectors, most especially ones that are based in Dubai and Abu Dhabi utilize phone calls and letters in contacting debtors and try to make them pay your business for what it is owed. When a debt collection agency in UAE isn’t able to reach a debtor using the contact details that were provided, then they look much future through private investigators and computer software.
You don’t have to give up entirely on unpaid invoices and bills. Call us here in HHS Lawyers to know more about debt collection in Dubai, UAE.
