There’s nothing quite like dealing with a wealthy customer who has turned into your debtor. You KNOW he has the cash … you can see his swanky new car. But regardless of his many impressive personal assets, his company still won’t pay up. Could collecting a past due account be any more frustrating?
It comes down to this: Those who form corporations usually have lawyers, CPAs and financial advisors who know how to help them avoid personal liability for any debt their business incurs. It’s their job to take great care to insulate their client’s personal assets from creditors so that, even if the company fails, their client’s personal wealth is protected.
Don’t let a person’s wealth frustrate you into ineffective attempts to collect. Stay professionally persistent like you would with any other debtor. Send frequent, firm reminders, make professional phone calls, remain open to payment solutions, consider only COD orders if applicable or cut off services until a payment is made.
When initially extending credit, you may want to consider having your customer sign a personal guarantee. This will allow you to go after personal assets if a company fails to pay.