Small business owners spend so much time trying to get customers that it is very difficult to do enforcement on those who are late paying.
Here are some suggestions:
* A properly drawn purchase order or receipt will bind the customer to pay the bill and to pay any collection costs, attorney’s fees and interest on any outstanding balance. Done properly it will not intimidate your customer but it will save you bundles in collection costs since you are not entitled to attorney’s fees if they are not in a written agreement.
* Turning over all your past due accounts at say 60 days past due will allow you to avoid confrontations and concentrate on your business. Disgruntled customers can be simply directed to the collection agency or attorney.
* A number of check services will allow you to verify checks before accepting them. If you do not use that service you can collect on bad checks through either civil or criminal courts (although the commonwealth does not like you to press criminal charges just to collect bad checks – those charges should be filed because you are a victim of a crime, not because you want the money).
Other buisness related questions should include things like:
Here are some suggestions:
* A properly drawn purchase order or receipt will bind the customer to pay the bill and to pay any collection costs, attorney’s fees and interest on any outstanding balance. Done properly it will not intimidate your customer but it will save you bundles in collection costs since you are not entitled to attorney’s fees if they are not in a written agreement.
* Turning over all your past due accounts at say 60 days past due will allow you to avoid confrontations and concentrate on your business. Disgruntled customers can be simply directed to the collection agency or attorney.
* A number of check services will allow you to verify checks before accepting them. If you do not use that service you can collect on bad checks through either civil or criminal courts (although the commonwealth does not like you to press criminal charges just to collect bad checks – those charges should be filed because you are a victim of a crime, not because you want the money).
Other buisness related questions should include things like:
Is liability a concern in your high-risk business?
The business form can protect your personal assets like your home and car, from being seized in the event the business is liable for something serious. Insurance can help here too but beware the insurance agent just looking for a sale.
Do you need to be able to transfer the business? From partner to partner, stockholder to stockholder, parent to child or otherwise?
Buy-sell agreements, first refusal options, and estate plans will guarantee that you do not end up in business with someone you do not work well with. They can contribute to good tax planning as well.
Are you sure that death or disability do not cripple the business?
Insurance and properly funded buy-sell agreements can help.
Have you set successful business strategies to take money at the lowest tax rates? Pension plans, benefits packages and leaseback schemes are all legal and proper if done right. You can own property for example, and lease it to your business allowing you to take rental payments out of the business each month without incurring payroll taxes on the payment.
More sophisticated strategies include parallel corporations that can serve as feeder companies that allow you some flexibilities in your income and expenses.
Do you have routine business checkups to help save money?
For example a good collections process will improve your bottom line and a review of your invoices/purchase documents can guarantee the maximum dollar on collections and also include attorneys fees. Other areas that need frequent review include your debt to equity ratio, workers compensation policies, state and federal tax planning, personnel policy manuals, employment contracts (including noncompete clauses and buyouts) not to mention a review of your books and records to include minute books, leases, etc. Remember: Saving $10 is a net of $10. If you run on a profit percentage of 25% then saving that $10 is the same as increasing your sales by $40! Where is your time better spent? Increasing sales or cutting costs?
The business form can protect your personal assets like your home and car, from being seized in the event the business is liable for something serious. Insurance can help here too but beware the insurance agent just looking for a sale.
Do you need to be able to transfer the business? From partner to partner, stockholder to stockholder, parent to child or otherwise?
Buy-sell agreements, first refusal options, and estate plans will guarantee that you do not end up in business with someone you do not work well with. They can contribute to good tax planning as well.
Are you sure that death or disability do not cripple the business?
Insurance and properly funded buy-sell agreements can help.
Have you set successful business strategies to take money at the lowest tax rates? Pension plans, benefits packages and leaseback schemes are all legal and proper if done right. You can own property for example, and lease it to your business allowing you to take rental payments out of the business each month without incurring payroll taxes on the payment.
More sophisticated strategies include parallel corporations that can serve as feeder companies that allow you some flexibilities in your income and expenses.
Do you have routine business checkups to help save money?
For example a good collections process will improve your bottom line and a review of your invoices/purchase documents can guarantee the maximum dollar on collections and also include attorneys fees. Other areas that need frequent review include your debt to equity ratio, workers compensation policies, state and federal tax planning, personnel policy manuals, employment contracts (including noncompete clauses and buyouts) not to mention a review of your books and records to include minute books, leases, etc. Remember: Saving $10 is a net of $10. If you run on a profit percentage of 25% then saving that $10 is the same as increasing your sales by $40! Where is your time better spent? Increasing sales or cutting costs?
The Law offices of
PAUL BUCKWALTER
Brandermill Trade Center
13509 East Boundary Road, Suite E
Midlothian Va, 23112
804/744-8744
paultb@paulbuckwalter.com
PAUL BUCKWALTER
Brandermill Trade Center
13509 East Boundary Road, Suite E
Midlothian Va, 23112
804/744-8744
paultb@paulbuckwalter.com
The information contained herein is intended to entertain and inform on general principals of the law. It is not a substitute for personal legal advise. If you have a legal problem you should seek the advise of counsel.
Published by Paul T. Buckwalter - All Rights Reserved
Published by Paul T. Buckwalter - All Rights Reserved