When it comes to collecting a commercial debt, one rule is absolute: The reason for non-payment determines the path to resolution. Simply put, you must identify the problem to solve the problem. For example: If non-payment has to do with cashflow, the solution must take into account your debtor’s cashflow issues head on such as agreeing to a manageable payment structure, reducing services to decrease costs, creating a temporary hold on services, or other creative ways to maintain or end the relationship and get paid. However, if non-payment has to do with a dispute about the meaning of the contractual terms your solution requires expert contract interpretation, caselaw review and possibly motions for judicial contract review. The paths to a solution are all very different depending on the reason for the breach. If you are on the wrong path you will not get paid. Sounds simple enough but it’s not always clear. Companies facing financial difficulties may fabricate a dispute, or point fingers and blame the other party for breaching first, or create a mountain of red tape to hide the decision maker. Hiding, pointing fingers and playing the blame-game are effective ways to delay payment.
To get paid, you must get on the right path quickly.
Things to look for to get on the right path to get paid quickly: (1) Someone who wants to hide money will not return calls and emails. Companies that truly have no money deal with creditors to close or restructure the business. (2) Contractual language disputes are discovered with the first invoice. If it’s an honest misunderstanding, it happens early on. FUN FACT: Failure to deal with contractual disputes early on can, in some instances, alter the terms of a contract. (3) When a customer experiences poor service, they report it throughout the relationship, not just when collections begin.
If your company has a commercial debt collection case, get on the right path to collection and contact Frisella Law Firm.