by Inga B. Andriessen
Andriessen & Associates, Barristers
Toronto, Ontario
Many stereotypes of women hold us to be meek, unassuming, and easily taken advantage of. To a degree, this can prove to be true in business, particularly when faced with an instance of someone refusing to pay for goods or services supplied.
Many women initially question what they did wrong, and are launched into a sense of futility and hopelessness in attempting to collect what are often reasonably small debts.
This does not need to be the case. If one is not being paid, many times it is a cash flow issue on the part of the purchaser, or the purchaser is a person who is used to taking advantage of other people.
What To Do
In order to ensure that you get paid for the goods and services you provide, you must have a plan and stick to it.
As a young lawyer, the most uncomfortable moment of my career occurred when I rendered my first invoice. For whatever reason, I felt very uncomfortable putting a monetary value on the services I had supplied. I quickly got over it.
A plan which is effective for many businesses, that do not require payment up front, or at time of service, is 30-60-90-sue.
In this method, the manner of approaching the receivable account starts with a relatively friendly demeanor, thereby facilitating an ongoing relationship with the customer, and ultimately gets to the point where you protect your interest by pursuing a legal remedy.
30
At the end of a 30 day period, the customer who has not paid should be reminded that the amount is outstanding and that payment is expected. This can be done with a traditional letter that requests payment and thanks the customer for payment in the event it has been sent; alternatively, a good reminder is a receivable statement which includes not only the original amount but also an amount of interest.
Be aware that if you are charging interest, in order for it to ultimately hold up in Court, the amount must be stated as an annual amount, not a monthly amount, and expressed on the original contract, if one is entered into or the original invoice, if that is the only document which is rendered.
At approximately 45 days, a follow-up phone call is a very good idea. Many times people are able to ignore paper but are unable to ignore a friendly voice. I emphasize friendly voice at this point. The old adage you get more flies with honey than vinegar remains true, as does the adage, the squeakiest wheel gets oiled first.
Therefore, a friendly call to your actual contact at the company, rather than the accounts payable department, which is conditioned to ignore reminder calls, is more likely produce effective results.
60
At 60 days, you must send a very firm letter. This letter should indicate the amount owing, any interest accrued, and remind the company that the debt must be paid immediately.
A followup phone call every five days after 60 days is a good idea in order to ensure that you are being an effective "squeaky wheel."
Rather then calling on a Monday morning when many crises are dealt with, or a Friday when someone is simply dreaming of getting away, Tuesday or Wednesday are best days for collection calls.
You may, during your telephone call, wish to advise the company that owes you money that you have spoken with a lawyer and are making this call at their recommendation.
90
If you have a receivable that is outstanding for 90 days, the customer either simply does not have the money or is attempting to play hard ball. Either way, you cannot allow this to lapse until 120 days. Therefore, send a 90 day letter indicating that the account is outstanding, the amount of interest included and advise that if payment is not received in five business days, the matter will be referred to a lawyer or collection service. It is important to follow up with your threats. Idle threats are worse than no threat at all.
Sue
In Ontario, amounts that are $10,000.00 and under, fall within the Small Claims Court jurisdiction. You are entitled to represent yourself at Small Claims Court, and there are many helpful books and precedents to assist you. Alternatively, you may retain a law firm, such as Andriessen & Associates, Barristers, where Small Claim Court matters are handled at the rate that the Court awards fees back to ensure that the client is not out-of-pocket once the Judgment is recovered.
Attitude is important
Bear in mind that you have provided good service and are entitled to payment. Never shy away from collecting money. If you do, people will hear about it and will take advantage of you continuously.
It is better to establish a tough reputation and only do work/provide goods to those who are actually willing to pay for them, rather than toiling endlessly and tracing accounts. If you implement a 30-60-90-sue method, you will likely have a very minimal receivable problem.
If you have provided a good or service, you deserve to be paid for that and I’m available to help you ensure that you do.
© 2003 Inga B. Andriessen
Inga B. Andriessen was called to the bar in Ontario in 1993. Originally from Victoria, BC, Inga graduated from Osgoode Hall Law School in 1991.
I’m known for being aggressive and getting results in the quickest, most cost effective manner possible.
The nature of Inga’s law practice is limited to trial work involving corporate/commercial and collection issues. Please contact her at:
Andriessen & Associates, Professional Corporation
701 Evans Avenue, Suite 900
Toronto, ON
M9C 1A3
Phone: 416-620-7020
Fax: 416-620-1398
Website: www.andriessen.ca/
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