Small Business Tips 1
Debt collection can be a major source of frustration for small business owners. These tips are designed to help you understand your options and make the right decisions for your business. If you need assistance collecting a debt, contact your LegalShield provider law firm.
- It all starts with good accounting practices. Accurate and detailed records will help you quickly identify and deal with delinquent accounts. Your customers and clients should know exactly where their account stands. Provide itemized invoices that include a specific due date for payment. If an account is delinquent, include the total amount owed, the number of days past due, the original due date and any late fees or interest owed.
- Do not ignore a past due account. Don’t wait to take action on a debt. You should not let a past due client or customer accrue more debt or continue to receive services. The longer a debt remains unpaid the less likely you are to collect.
- Know the rules for debt collection. The Fair Debt Collection Practices Act (FDCPA) regulates collection agents, law firms and other third party debt collectors. Original creditors are generally regulated by state law, which may vary greatly. Some states, like California, have laws that are similar to the federal regulations. Violating state or federal regulations could result in legal action. Make sure you are compliant with state law in regard to charging interest or late fees on past due accounts. Call your LegalShield provider law firm to learn more about the laws where you do business.
- Be professional and courteous in your collection efforts. It is illegal to threaten, harass or intimidate customers who are unable to make payment. Never threaten an action you are not willing or legally allowed to make. Keep in mind, a customer who is behind now may make good on their obligation and become a valuable customer.
- Consider accepting an installment plan. Some customers simply do not have the funds to make a one-time payment. Try working with the customer to determine what they can afford or if installment payments are feasible. Be sure to document any agreement you make in writing and have the customer sign a copy to acknowledge they intend to make payments. Your LegalShield provider law firm can help review your agreement prior to signing.
- Utilize your LegalShield membership benefits. One of the greatest benefits of your LegalShield small business membership is having an attorney draft collection letters on behalf of your business. The attorney may review your documentation and draft a letter directly to the debtor to formally request payment.
- Take legal action in small claims court. If your initial collection efforts fail you may have no choice but to take legal action against a debtor. Small claims court generally offers a streamlined process for collecting debts under a certain amount. Click here to read our article from April 2014 on small claims court.
- Talk to your LegalShield provider law firm. If the amount owed exceeds the maximum allowed in small claims court you may need to consider other legal options. Your LegalShield provider law firm can explain the laws where you do business and help you decide on the best course of action.
Without a formal HR department, many small business owners and managers put off dealing with challenging employees. No matter how small your company, it is important to set formal policies, properly document job performance and follow any applicable regulations. Failing to properly document and deal with a problem employee could damage morale and your bottom line. If you have questions about an employment law matter call your LegalShield provider law firm.
- Be proactive and develop an employee handbook. A carefully written HR handbook will clearly define expectations for all employees and managers. An employee handbook will also help protect your business from litigation. Your handbook should outline everything from benefits, time away from work, harassment, non-discrimination policies, performance evaluations and workers’ compensation. Provide each employee with a copy of the handbook and have him or her sign a document stating that it was received. If you need assistance reviewing or developing your company’s employee handbook contact your LegalShield provider law firm.
- Set up a personnel file for every employee. Each file should contain the employee’s resume, job description, signed policy documents and any other documents related directly to job performance. A personnel file should not contain personal details such as medical information, financial history, social security number, race, gender, nationality, sexual orientation or any other personal information not directly related to job performance. Personal information should be kept in a separate file not to be used in evaluating an employee’s performance.
- Some matters require immediate termination. If an employee violates specific company policies involving harassment or customer privacy or if they steal or commit any other action that jeopardizes your business or another employee’s safety, document what happened and take immediate action.
- Schedule regular performance reviews for all employees. It is important to set a standard performance baseline for all employees. Focusing only on problem employees will make your actions seem arbitrary rather than purposeful. Evaluations allow you to set realistic goals for improvement and growth.
- Address specific concerns when they arise. It is vital to discuss matters when they happen instead of waiting for a review. Waiting may make the issue seem trivial or may catch the employee off guard. Use the annual review to address how the employee has responded to any issues that came up during the course of the year.
- Document your concerns in the employee’s personnel file. If you discuss a concern with an employee make a note in their file. Many companies hold off on terminating employees because they do not have any documentation. Any significant discussion of job performance or violation of company policy should be noted in the employee’s file.
- Provide feedback and set concrete goals for improvement. Avoid taking punitive action to correct a concern. Do not badmouth the employee around the office or talk to them in an unprofessional manner. Set specific goals and put them in writing for the employee to sign and acknowledge. If an employee fails to meet the goals you have set then you can take further action.
- Clearly define consequences for failure to improve or to take corrective action. Failing to define what will happen if the employee does not improve provides little incentive for improvement. If an employee will be terminated for not meeting specific goals, make sure they understand that is the consequence.
- When necessary do not hesitate to terminate an employee. Firing an employee is one of the most difficult jobs a business owner or manager can face, but sometimes there is no alternative. If you are concerned the employee may become confrontational ask another owner or manager to sit in on the termination meeting. Call your LegalShield provider law firm if you need assistance with an employment law matter.
If a product your company designs, manufactures or sells causes injury or property damage you could be liable. It is important to understand your potential liability and how to best protect your business from legal action. To learn more about product liability laws where you do business contact your LegalShield provider law firm.
There is potential liability at nearly every level of the supply chain. A product could cause injury or property damage because of a design flaw, an error in the manufacturing process or due to failure to properly instruct or warn a consumer about potential dangers. In many cases product liability suits are brought against everyone involved in the development, creation and sale of the product.
Each state determines its own product liability law via statutes and judicial decisions. In some jurisdictions product liability matters are considered on the basis of strict liability in which case your level of fault is not a potential defense. This means, even if the defect that caused an injury was accidental your business could still be liable for damages.
The best way to protect your business is by purchasing product liability insurance. Discuss your options with your insurance agent and contact your LegalShield provider law firm. Your LegalShield provider law firm can review the terms of potential policies and help explain the laws that may apply to your business.