As a community service, the Law Offices of Karen M. Riggio, LLC publishes a complimentary e-newsletter designed for business owners and independent contractors. Each month, we offer valuable tips and practical, real life answers to today’s common contract issues and collection problems. Feel free to e-mail us your suggestions for future articles.

Karen M. Riggio

Over the summer, I have been closely watching some important economic indicators, and it is becoming clear that our economy is slowing down ... the real estate market is flat, homes are not selling quickly, interest rates are rising significantly, and foreclosures are occurring at a much accelerated rate.

As people find it more difficult to refinance and consolidate debt, it will become increasingly difficult for them to make and keep their payment arrangements. With these economic trends in mind, it is more urgent than ever for business owners to carefully review their old accounts receivable.

When should you turn an account over to collections? Here are some typical signs ... If your customer:

• Makes repeated, groundless complaints to try to avoid payment
• Flatly denies owing you any payment, despite your records
• Will not respond to your final notices or repeated phone calls
• Attempts to create payment plans or changes the terms
• Changes his address or phone number without leaving forwarding information.

Your cash flow is the lifeline of your business. I strongly encourage you to contact any delinquent account (over 90 to 120 days) and secure settlements on past due amounts. Should you need assistance with slow paying customers, contact our office to consult on appropriate collection procedures.