Debt recovery in Egypt or generally chasing a non-paying customer is often a messy process, but not if you took the following steps. In this article you will learn How to handle non-paying clients
1. Research your client
If you’ve never worked with a client before, take the time to do research and find out who you’re dealing with. Ask your contacts if they know anything about your new prospect, and see if there are any complaints against them.
“Most non-payments can be prevented by screening the customers in advance. And how to handle non-paying clients starts before them turn to be your clients.
2. Have a contract
No matter if it’s your friend or the most respected business leaders in your industry, always have a written contract in place. The contract should address these legal concerns:
- Payment schedule
- Terms
- Preferred payment method
- Scope
- Deadline
- Late payment policy
It’s essential to get all details in writing so you don’t face issues down the road. For instance, if your client is aware they owe fees for overdue expenses, they’ll be less likely to flake – and if they do, they’ll be forced to pay interest.
3. Ask for a deposit
If you ask for a portion of the payment upfront, you’ll absorb some of the hit. Asking for a deposit or retainer is common when negotiating with clients and will help cover the expenses or time that you already put into a project.
Approaching non-paying clients
Sometimes, no matter what you do to prevent the issue, you’re still left empty-handed. If you’ve taken all of the precautions and a client still hasn’t paid the invoice, you’ll need to act fast. Here’s how to approach the issue.
1. Weigh your options
Ask yourself if chasing down the client is really worth it. If the payment was only a small percentage of your yearly income, it may be better to let it go and write off the client for future business. But another and better option is to assign the case to a collection agency who will not charge you before they collect the money. If you already have unpaid invoices, you may try and consult TCM Egypt about debt collection in Egypt.
2. Follow up
Don’t hesitate to send out an email if the invoice has not been paid by the agreed-upon date. There’s always a possibility that the invoice was lost or misplaced.
Send them a friendly yet firm email reminding them that the invoice is past due and you’d like to resolve the issue as soon as possible. Also ask if they have any concerns with the product or service that you provided.
3. Talk to a debt collection company
When your client is either resisting or ignoring your requests, and you still think the unpaid invoice is worth the trouble, you should involve a third party to seek advise on how to handle non-paying clients. But don’t ask a friend or look online for help; meet with a specialized collection company who will suggest which proper courses of action you can take against the customer.
4. Hire a debt collection company
You could also hire a debt collection agency in Egypt to collect the debt for you. You can find a reputable collection agency like you would with other professionals, such as accountants or lawyers. A licensed collection agency is experienced, trained and skilled to pursue recovery while trying to maintain a good business relation with your debtor, should you want to keep doing business with them. Most agencies will offer you to collect on a contingent fee and on a ‘no win, no fee’ basis. This way, you can rely on their assistance while not incurring further costs and keep focusing on your business.
TCM Egypt helps clients with debt collection in Egypt and worldwide, debt recovery in Egypt and worldwide, accounts receivable management, and business investigation in Egypt and worldwide.
