Whenever possible, most business owners would prefer to work with clients or hire a third-party collections service to resolve unpaid invoices, but this isn’t always possible. In many cases, you might choose to simply write off the loss, but if the amount owed is substantial, it may be worthwhile to sue the nonpaying customer. Speaking with an accountant and compiling careful records can help ensure you receive a judgment in your favor.
3 Tips for Suing for Nonpayment
1. Collect Records of Services & Products Provided
The foundation of your lawsuit will depend on proving that you provided goods or services to a client, for which they agreed to pay. Collect any records you have detailing what you delivered to the customer, which may include invoices, shipping receipts, and any correspondence regarding their order. Any contracts you signed with the nonpaying party will also be valuable evidence establishing your right to a fair payment.
2. Document All Efforts to Collect
Litigating a customer for nonpayment is considered a last resort, so be prepared to demonstrate that you’ve exhausted all of your other options. Document every phone call made and letter sent, as well as any actions taken by a third-party collections specialist.
3. Seek Professional Assistance
The legal system is extremely complex, so you should consider hiring an attorney before taking a matter to court. You may also need an accountant to review your records and prepare your evidence, ensuring you have the strongest case possible. To prevent similar problems in the future, turn your accounts receivable over to a third-party provider with specific collections expertise.
As one of La Crosse, WI’s most experienced and respected accountants, Tostrud & Temp, S.C. offers a full suite of services to businesses throughout the region. From litigation support to payroll management, their team can handle any need, allowing you to concentrate on growing your business. Visit their website for a comprehensive look at their business services, or call (608) 784-8060 to discuss your needs with a qualified accountant today.