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Collection Strategies for Artists

by

Use these steps to collect from those who still owe you money for your art or services.

 

Dealing with Deadbeats? Read these Collection Strategies for Artists at www.ArtsyShark.com

 

Got a problem with a deadbeat? They are the worst, aren't they? These are people who say they want to work with us, or purchase from us, and when it comes to paying the bill, they don't follow through. If you are stuck in this incredibly frustrating situation, you're not alone. But rest assured that there are collection strategies that work and can save your sanity, too.

If you've delivered your artwork, a wholesale order to a retail store, or performed services and are waiting for payment that is past due, you need to take action promptly. We teach people how to treat us – and not getting in touch with clients about late payment sends a clear message to them that you are willing to roll over and take it.

Keep this in mind: the longer the period of non-payment, the greater the chance that nothing will ever be paid. And payment will more likely be made to those creditors who demand it. In the words of a lawyer friend, "The very best way to collect is to make them feel that paying your bill is at the top of the list – more important than even paying their rent."

It's not quite that serious when a bill is first overdue, however. These steps will help you collect promptly, with the intention of avoiding a hardcore approach or resorting to legal remedies.

Phone contact

  1. Keep records of due dates, and when a payment is clearly late, get in touch. This first contact will give them notice that the balance is unpaid, and require a response. When you make the call, have your invoice in front of you and be able to provide shipping dates, purchase order numbers, proof of delivery or other information needed to identify the bill and the amount owed.
  2. Speak directly to the person who is responsible for paying the bill. When you reach out, don't disclose the purpose of your call to their assistant, secretary or gatekeeper. You will need to determine whether you are speaking to an individual who personally made a purchase, an employee in an accounts payable department, the gallery owner, etc. and have their name in front of you when you call.
  3. Keep your call brief and to the point, and state your case clearly, asking for payment. "I shipped this item 45 days ago, with Net 30 terms, and it is unpaid. Will you send a check for the balance today?"
  4. Allow time for them to respond. There may be an explanation for the problem, or a situation that you can solve easily with them. If the debtor launches into a tirade, let her talk herself out – don’t respond or interrupt. This might be the first time anyone listened to her. In addition, when she doesn’t hear you trying to react, this can defuse the situation.
  5. There’s a place for aggressive, insistent, demanding forcefulness, and some debtors only respond to this. It’s also important, however, to remember to not cross the line into hostility and abusiveness.

That initial phone call may or may not get results, so follow up with regular contact. Send a letter as well, especially if their are avoiding your calls.

Mail contact

  1. Send a collection letter customized to that client, which is brief and to the point. To forestall claims that an invoice was never received, attach a photocopy of it to your letter.
  2. A certified letter with return receipt requested will give you proof that it was received, and avoids the claim that they never heard from you about the overdue bill.
  3. To spotlight the late payment, place the amount and exact number of days overdue (as of the date of the letter) in full caps at the top of the letter.
  4. The consequences of failure to pay are negative. Putting your message in terms of the positive benefits of payment gives you a better chance of collecting.
  5. Take the “form” out of form letters by adding quick handwritten comments to catch the reader’s eye.
  6. Sign all collection letters yourself.
  7. Final demand letters signed by your attorney, on his or her letterhead, will likely produce better results than the same letter over your signature.

Many debts can be cleared up using these techniques. Always approach these tasks professionally, without becoming emotional, insulting or threatening. The truth is that most people do want to pay their bills. You may have to agree to allow several payments to clear a balance if that's what it takes to get paid, but it's better to move forward with at least partial payment as it will allow you to remain on positive terms with the client.

Legal action should always be the last resort, but if you threaten to take the other party to court, you should be prepared to do so. Research the process of debt collection through legal channels in your own jurisdiction. Often, you can do this yourself through the District Court system if the debt is not overly large, and you can collect not only the amount due, but your court costs as well.

Once you receive a judgment against the other party, there are ways to enforce it, such as a bank attachment. This legal remedy requires their bank to freeze their account for the amount of your judgment and issue a check to you for that amount. Bank attachments carry hefty fees, and combined with court costs can increase the amount they must pay considerably.

In the event that the debt becomes difficult to collect, you might want to research the steps in the legal process, and lay these out in a letter, informing them of the added amounts that a judgment will cost them. This might just make your past due invoice hit the top of their list to pay.

Carolyn EdlundThis article is courtesy of
Carolyn Edlund, founder of Artsy Shark, is a business writer, speaker and consultant for artists. She is the Executive Director of the Arts Business Institute, presenting at art business workshops throughout the United States. Carolyn works with artists every day in strategy sessions designed to help them structure their businesses, set and reach their goals. Find out more about scheduling your own business consultation with Carolyn here: https://www.artsyshark.com/build-your-art-business/New window