New Year's Resolutions to Help You Get Paid

Financial New Year’s Resolutions

Many of us take the opportunity of the new year to make personal health resolutions ranging from losing weight, exercising more to quitting smoking. If you’re serious about improving the financial health of your business, you may want to think about the following new year’s resolutions. They’re designed to make sure that you get paid by your customers:

1. Get your agreements in writing. While many prefer the informality of handshake and oral agreements, the problem with non-written agreements is making sure that everyone agrees on all of the terms. While it sometimes may take longer to get an agreement reduced to writing, if a disagreement arises, it will be much easier to resolve — or enforce — if there is a written agreement in place.

2. Try to get at least a partial payment up front. The terrible truth about human nature is that once one party fully performs under a contract (for example, by performing services for the customer), the customer is much less motivated to pay. Why should they? They’ve already gotten what they needed from you. To balance this, try to obtain at least a partial, if not a full, payment first before beginning work.

3. Similarly, please, please, please consider, at a minimum, reserving the right to stop working for the customer if they stop paying you. There’s nothing worse than being in a situation where you have to keep working without knowing if you will EVER get paid. Not working and not getting paid beats working and not getting paid any day. Protect yourself and reserve the right to stop working for the customer if you’re not getting paid.

4. Put an attorneys’ fees clause in your written agreement. In the United States, the normal rule is that each side in a lawsuit is responsible for their own attorneys’ fees. However, this can be changed by contract. This means that in your agreements, you can agree that the party winning the lawsuit can recover their attorneys’ fees. If a person who owes you money after you fully performed under the agreement understands that if they don’t pay you, they could be responsible for paying for your attorney, this may help you get paid easier.

5. Do not ignore slow or no-paying customers or put bad debts on the back burner. Debts are not wine. They do not improve with age. If you think there’s a problem with a customer paying you, there is. The sooner you address it the better. This means that you look at the likelihood of getting paid realistically and make a decision whether to (a) enforce the debt or (b) write it off. Drifting along in a no-man’s land and refusing to make a decision is the worse thing you can do.

While there may be other things that you can do to improve the financial health of your business and make sure that you get paid, think about adopting at least one of these financial new year’s resolutions. Happy New Year to all!

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