Three Ways to Get Paid – The Questions
As a commercial collection attorney, I have the benefit of seeing and analyzing credit applications from a wide array of clients. However, by the time I review the credit application, typically the account is already in arrears and whatever rights my client may have were established long before. After the fact, I am often asked by clients, “What could we have done better?” Here are three things you can do now to protect your payment rights:
Fulfilling Orders Under a Customer’s Purchase Order
You receive a new order from a long-term customer for state-of-the-art switchgear, a huge high-value lighting package and day-to-day supplies for a new high-rise project. Accompanying the order is the customer’s purchase order, containing the “fine print” terms and conditions. Because the customer has been loyal throughout the years, you decide to fulfill the order without reading the purchase order. After your receivable ages to over 120 days, you question your customer and it responds that it has not been paid yet, so payment to you is not yet due per the terms of its purchase order.
True or False: There is nothing that you can do to protect yourself from onerous terms of a customer-issued purchased order.
The Balance Due is Small You have a customer that owes a balance but it is relatively small.
True or False: There is nothing that you can do other than write off a receivable that is a small amount.
Your Customer is Having Difficult Financial Times You have a customer that is not paying its bills and says that the company is failing and is about to go out of business.
True or False: Since the customer is going out of business, there is nothing that you can do to collect the balance owed.