Sep 1, 2020
You can feel COVID-19’s impact across the nation. Businesses are forced to close, entire cities put into quarantine, and necessities being harder to get are just some of its effects. But did you know that COVID-19 has also affected your business contracts?
Why You Should Never Allow COVID-19 to Be Used As An Excuse Not To Pay You
We’re four to five months into this pandemic. We’ve mentioned how the pandemic will cause a downturn or recession, which has been the case so far. Many businesses that have started struggling are now using COVID-19 as an excuse. You should never allow your debtors to use it as an excuse for not paying your fees.
They Were Never Planning To Pay You In The First Place
A client who owes you a fee from January or earlier means that they were never planning to pay you in the first place. They are simply using COVID-19 as one of the reasons to pay you later or not at all.
Be Very Careful When Dealing With Debtors
It would be best if you always were very careful when dealing with debtors. They might be able to void your contract from under your nose if you aren’t. One example is if they say, “hey can we pay X and pay the rest later”. They will start turning this into “hey can you modify this section of the contract”. The minute they start rewriting these terms, you end up punching holes into your contract until it is no longer valid.
What Could You Do To Minimize The Impact of The Pandemic on Your Business?
The most valuable asset you have right now during the pandemic is time. Over the last few months, the government has been providing ways for businesses to stay afloat. Eventually, the money they received from the government will dry up. You need to move quickly and turn up the heat on your debtors. Otherwise, you might not be able to collect your fees.
Work With Your Debtors
The pandemic has called a large number of businesses to struggle. Your clients could be one of those struggling. However, if they’ve been making the right payments over the last few months around April or May, try to work with them. Offer them the benefit of the doubt and offer extended payment plans or something similar.
Have Us Pull a Credit Report For You
Some businesses can be a problem before you even start working with them. A great way to identify them is to pull a credit report on them. Credit reports give you the information you need
to decide whether someone will be an issue to collect from or not. Utilize us or not; you have to do something to prevent any problems during an already challenging time.
What to Do If Your Clients Are Asking You To Cancel The Contract
One of the more common occurrences during these tough times is your clients asking to cancel the contract. Feel free to accept the “termination” of the contract but never the “voiding” of the contract. Wording matters here as the termination of a contract protects you while voiding it removes every safeguard you have in that contract. Voiding a contract means that it never existed in the first place.
Key Takeaways
● You need to move quickly and turn up the heat. Whatever cash they had is going to start drying up, and a credit will be much tougher to get moving forward.
● If your debtor didn’t pay you yet, that just means that you weren’t a high enough priority for them when they had the cash.
● Letting your client constantly rewrite your contract's terms means that you’re punching holes into your contract until it isn’t valid anymore.
● It’s like politics. If you say it, it has its own life