You can lose money in your business a lot more ways than simply failing to meet your sales quotas. One of the biggest problems businesses face in managing their books is getting all their customers to pay on time – or to pay at all. Many direct-to-consumer businesses don’t have this problem because they collect money at the point of sale. The customer wants a product, and they pay for it before walking out of the shop with it. But many service-oriented businesses operate differently. They often perform the work without payment, or only on deposit, and then send an invoice when the work is done. The customer doesn’t always pay.
Credit agreements are the contracts that regulate these kinds of transactions. As an Arizona business, it’s important that you routinely audit the agreements you use to ensure that they are getting you the results you need to keep your business afloat. It’s best to work with a local business lawyer in Gilbert on this process to ensure you think through all the pertinent legal issues and that you create agreements that are legally binding. Here are a couple of things that your Gilbert business attorney may suggest:
If you provide a service and a customer does not pay you, you may have a hard time getting that person to pay. The more information you can get from the customer before you do business, and the more clearly your agreement is spelled out in a contract, the more likely you are to be able to get what you are owed. Any legal claims you pursue will be much more likely to be successful.
Your written credit agreement should clearly state the service that is being offered or the product being provided, the cost, and when the payment is due. The agreement should also clearly identify both parties. Work with a business lawyer to draw up a strong agreement. You can either work with your business attorney on each agreement, or you can ask your attorney to draw up an agreement that you can use as a template for multiple clients. If you already have such an agreement that you use, ask your Phoenix business lawyer to review it and make needed changes.
You may offer a service or product that requires a significant investment. Or you may routinely enter into agreements with clients that involve ongoing services or product deliveries. In such cases, you will want to ensure that your clients have the means to pay. Otherwise, you may get prompt payments early in the relationship and then have to chase the client for future invoices.
You can ensure the client’s ability to pay by requesting financial statements. You may ask to see a current balance sheet and a profit and loss statement. Or you may request an aging report. The right documentation depends on the kind of relationship you will have with the client, as well as the client’s reputation and history. Work with your Gilbert business attorney to determine the right documentation to request and how to evaluate it.
Work closely with your business lawyer to determine what other steps you may want to take to ensure proper payment or to increase your success of enforcing contracts or collecting on debts. For example, your attorney might also suggest adding a guarantee clause to your agreements to ward against future defaults. Or your attorney might suggest adding an attorney fee provision that will let you collect legal fees if you have to litigate a claim. Talk to your business attorney in Phoenix to determine the right agreements and addendums to put in place to protect your business.
Contact Denton Peterson Dunn to review your credit agreements and other contracts in the Phoenix area. We help businesses draft and negotiate contracts, as well as represent clients in litigation and other disputes. An experienced business attorney from our team can review your current documentation and processes to ensure that you are properly protected. Our top-notch legal team takes a personal approach, ensuring that your business’ unique needs are met for long-term success. We have offices in Scottsdale, Mesa, and Phoenix. Call us today to consult with an experienced business attorney about your needs.
Brad Denton – Denton Peterson Dunn
1930 N Arboleda #200
Mesa, AZ 85213
Office: 480-325-9900
Email: brad@dentonpeterson.com
Website: https://arizonabusinesslawyeraz.com
Mastering Due Diligence In Business Purchases: Essential Steps & Insights The Ultimate Checklist For Successful…
Maximize Business Growth: Strategic Partnership Strategies For Success Turbocharge Your Business With Game-Changing Strategic Partnerships…
Expert Insights On Mergers & Acquisitions In Arizona: Comprehensive Guide How Arizona Businesses Can Leverage…
Common Issues In Franchise Litigation & Best Practices For Mitigating Risks In Your Business Legal…
How Does Arizona Law Protect the Rights of Creditors in Collections? Legal Strategies for Enforcing…
What Are The Key Factors In Managing Franchise Business Operations Efficiently? Essential Factors For Efficient…
