I recently had an unfortunate experience with collecting payment from a client. I would like to share some information with you so that you will, hopefully, not have to go through this as well…
I had an unresolved invoice from a client and after many attempts on my part to collect the debt, I had to turn to a collection agency. This is not an avenue that any business owner relishes, however, I was able to receive some sound advice through the generosity of the collections agency. It was suggested to me that I add a “Personal Guaranty” to my standard business agreement. They even provided me with the proper verbiage! I would love to share this with you so that you may also take advantage of the great advice that I received.
In consideration of [COMPANY NAME] its subsidiaries or affiliates, extending credit, I/we jointly and severally do personally guarantee unconditionally, at all times, to [COMPANY NAME], its subsidiaries or affiliates, the payment of indebtedness or balance of indebtedness of the within named firm. I understand that this could include remedies up to and including reporting on my personal credit and responsibility for any and all collection or attorney fees associated with the recovery of any past due balances.
By adding the “Personal Guaranty” to your service contract, you may increase your chances of being able to collect if you should find yourself in the unfortunate situation of having an “noncollectable” account!!