Especially during a post pandemic recession, more businesses struggle to pay their debt. But when it’s your customers that are slow to pay, planning and meeting your own obligations is challenging. If you only have a few outstanding small invoices, it could be worth your own time to pursue the debtors yourself. So when should you hire a invoice debt collection lawyer?
For larger invoices, or when a customer is difficult or repeatedly late, an attorney may inspire faster payments. Around fifty percent of invoice defaults result in settlement when the debtor receives a notice from The Finman Law Firm. Nearly ninety percent of the balance of debtors attempt to settle once they are served a notice of the complaint filed on your behalf. Let’s look at that again. About half of those customers who defaulted on invoice payments cure their default to avoid having a case filed against them. Ninety percent of the other half settle when a complaint is filed to avoid court.
What is the Cost of an Invoice Debt Collection Attorney?
Perhaps we should ask the cost of not retaining an attorney for invoice debt collection. Invoices go into default specifically because the debtor isn’t paying them. Additionally, the hours you spend chasing bad debt takes you away from running and growing your business. There are expenses incurred in debt recovery other than your attorney’s fees. If the case goes to court, there is the expense of filing a court case including filing fees, service fees, clerk fees etc. These fees will apply whether you or your attorney files a case. However when the alternative is to chase debtors who defaulted on invoices, legal fees begin to prove themselves to be a sound investment. Your cash flow will improve in a predictable pattern, so you can plan your business activity.
A Well Crafted Contract by The Finman Law Firm Offers Protection Against Fees.
The majority of the other debtors are anxious to settle once they are served. A well-crafted agreement can posture the language to ensure the debtor pays your legal fees, so you don’t eat them. If a case continues through the court system, the judge’s ruling may reimburse your court costs.
Reduce Invoice Debt Collection Costs Through Better Invoicing Procedures.
Better invoices make it easier for customers to understand charges and initiate payments. They also help your customers pay your invoices timelier. Here are some commonsense invoice tips to consider.
The Finman Law Firm in Houston Texas advises on small business legal requirements with skill, knowledge and experience. This article, however, is not intended to be construed as legal advice. It is for informational purposes only, offering insights and awareness into the complex nature of small business law and invoice debt collection. Speaking with an experienced attorney is an advisable way to make sure your rights are safeguarded. You can contact us here.