Working in accounts receivable, it is almost inevitable that you will one day run into a situation where a customer is withholding payment much longer than you find to be acceptable. At this point, you may be wondering if you should sue them for the unpaid invoices. Although suing a customer for non-payment of services is absolutely an option once the invoice has gone unpaid long enough, it isn’t something that should be done often or in most situations.
When it comes to the question of how to take legal action and sue for unpaid/non-payment of invoices and services, there are two considerations you should make. Before taking a customer to court for non-payment and suing for unpaid invoices think about these two points:
- With how quickly social media spreads, suing a customer may spread negative information about you across the internet quickly. If a customer leaves a bad review online, even if they left out many important details, this could deter future customers and ruin your business reputation. Read about these internet review business blow ups here and here.
- Going to court is not the cheapest thing you will ever do. In fact, it is likely you will pay more in court costs than you will ever get back in the original invoice amount. Unless the invoice is worth a great deal, you may want to consider how much you will actually lose by taking the issue to court.
If you’ve seriously considered these two repercussions to suing for unpaid invoices and still feel it is the only and best options for your business, make sure you complete these tasks before taking it to court. They may help you to collect non-payment of invoice by examining the law and will ensure you have exhausted all options legally possible.
If you’ve sent multiple emails or letter requesting payment, you should have also made multiple phone calls. Sometimes those emails may have been stuck in spam filters or never got delivered to the right place. In order to avoid a complete misunderstanding, give your customer a phone call to check in and see why they haven’t remit payment.
This letter is different from all your previous collection letters. The tone should demand payment immediately and give them the option to call you and work out a plan for payment, or pay online in an online bill pay portal. You should make mention that if payment or a phone call is not received by a certain date that an attorney will be contacted and the credit bureau will be reported of this incident.
Going to court over unpaid invoices is a serious thing. It could damage the reputation of the business you are in an argument with, it could ruin your businesses reputation and it could be very costly. Make sure you speak with an attorney about all other possible options before jumping towards suing over unpaid invoices.
