Forums: Discussions for entrepreneurs and small business.

I think I would exhaust all things outlined in this thread before I would turn to the courts.   But that is my worthless opinion.  The courts are mess up and should be your last recourse.  But if you threaten to go to a lawyer or to court you must do so if all else fails.  There is nothing wrong with getting the advice of a lawyer this time and you will know what to do in the future.  Getting good legal advice is more than likely better than taking our advice on an issue like this one.  I will bet if you go to a lawyer he will start by you trying certified letters from you first.  But at least he will give you all the right words to use...

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

I don`t recall reading that discussion, so I can only comment on your post here and have to say that sure you can call "3% of accounts receivable going uncollected" as "normal", but I certainly wouldn`t stretch that to mean that "normal" is average or typical in a specific industry. 

For example, many of my physician clients see up to 40% no-pay.  The "average" for them is 20%.  Then again for a plastic surgeon or some other "cash up front" physician the 3% is probably "normal".

Thus my point is that even if 3% is normal among all industries and professions, you may actually see higher or lower in your specific industry or profession.



This is, in my opinion, excellent general advice, taking into account what I stated above - don`t use 3% if 3% is not right for your industry or profession.



If you are on the accrual basis of accounting for tax purposes then you can write off your uncollectable debts on your tax return.  If you are on the cash basis of accounting then you never paid on tax the income you didn`t receive so there is no write-off.


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Gina L. Gwozdz, CPA
http://GLGcpa.com
http://TaxTreasures.com

Yes, I take the point of the percentage as normal. I just remembered the topic where someone provided a service and wasn`t paid. Whatever`s "normal" for someone`s industry sector, they`d figure it out themselves.

As for the tax thing, if a product is shipped and gone, can`t you at least write off the cost to you of purchasing or manufacturing that product?

Most certainly!


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Gina L. Gwozdz, CPA
http://GLGcpa.com
http://TaxTreasures.com

jenidlg,
I know what you are talking about... I think what you need to do is toughen up your policies.. I think it`s time for you to start amending all your contracts if you have any, if you don`t... This is the time where you goto legalforms.com and find yourself a contract that fits your type of work modify it or have a lawyer modify it for you.
What I did was, joined pre-paid legal services, had lawyers modify all my contracts and when someone doesn`t pay, you have an actual lawyer calling the person.
See the problem with sending him to court is that, even if you summons him, he can re-schedule, and reschedule, and reschedule. By the time it goes to trial you would probably not even care about the money anymore. "A waste of time"..
It takes 30 days for the summons to be handed to him (it doesn`t happen tomorrow) then another 30 to 90 days for your hearing.. if he reschedules, they usually do it 90 day intervals. So if he reschedules 3 times thats 9 months form now that you would be going to court.
Although, that would shake his cage a little, I don`t think that, that`s your solution. Another thing you might want to do is send him to collections. DUNN & BRADSTREET has a good program where they write the letter for you and they do the calling.. if he doesn`t pay... Well then there goes his business credit..
Was this for a service or product?


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Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

hi jenidlg,

I don`t know how the laws would work since he`s in another state, and it could even be harder if you didn`t have an agreement drawn up, especially since he`s not local.

Try some of the other advice mentioned by others. I don`t know what industry you`re in, but here is a site that offers legal document forms in a template type format where you (or your attorney) could modify specific to your needs:

http://www.weblawresources.com/

Also...if he were local...this particular charge wouldn`t be dragged out for 90 day..., let alone 9 months. If he dragged this thing out that long on his own, then he`s probably very familiar with the `system`. But the average guy (and thats most of us), don`t know much about the legal system to drag stuff out this long without the assistance of an attorney (and that costs money).

if he were able to get all these types of extensions, he`d most likely need a lawyer, where he`d then be out of pocket (probably a lot more than what he owes you). But...since he`s out of state, I couldn`t tell you.

Consult with a lawyer in that case...but for scumbags who try and pull this stuff on you locally...this would be perfect

I agree!  Court is not a valid option for me at this time.  Not because I need the money but I have better things to do with my time like replacing him as a client.  What I have done is reviewed my time sheet, which he was questioning.  I found that I had made a few mistakes, unfortunately for him, they were in my favor. 

This gave me the information I needed to pursue him myself with the proof that he cannot question my timesheet and payment is expected by XYZ date or collections will proceed.  I have already obtained the services of a Collections Agency and they are chomping at the bit should he not respong to my curteous request that he pay up. 

I have already begun drafting proper contracts that will protect me which was the mistake I made with the previous client.  I allowed him to use his contract.  There was nothing in it to protect me.  That will not happen again. 

This has been a tremendous learning experience for me and I value the advice and support that I have recieved from the individuals here at Start Up Nation.  I look forward to growing my business with your help!!!

PS  I am a Virtual Assistant providing Administrative Services remotely across the US and Canada.

 

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Our Mission is to Serve our Clients with Professionalism and Efficiency.
www.SupportMyOffice.com

Cartess,
I am pretty sure, that the minute he gets served, he would consult a lawyer, most lawyers advise would be to drag it to the full extend of limitations (which is about one year)...
See she is facing a tough situatuion since he`s in NJ and she is in TX.
She would have to Fly out to NJ and do the filing out there... Not in her state...
Now they owe her 1,000.00 a ticket to NJ is about 300.00, on SouthWest.. I know because I`m originally from Linden New Jersey.. then she would have to go to the township that he is doing business in and file the summons...
To travel back and forth? It`s not worth the money and the time.

I think what she heeds to do is, Trash his business Credit.


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Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

I agree...in this instance since he`s out of state. The fact he was out of state wasn`t brought up until `after` I made my initial post regarding filing these charges.

Of course, in this case, it won`t be worth pursuing it legally since there was no contract involved and since it`s way out of state.

Cartess

With a VA business, you`re actually in a better position that you might be in other types of business.

Going forward, you likely will be able to charge by the week, which is standard I think for this type of service. So your worst-case scenario would be a 2-week loss. You bill at the end of week-1, work for week-2, don`t get paid for week-1, and stop. Have a discussion. If you still don`t get paid over time, at least you`re not sinking in more time, week after week.