{"id":4444,"date":"2017-01-26T11:21:04","date_gmt":"2017-01-26T16:21:04","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-finances\/how-to-take-legal-action-for-non-payment-of-invoices.html"},"modified":"2024-06-06T04:09:08","modified_gmt":"2024-06-06T09:09:08","slug":"how-to-take-legal-action-for-non-payment-of-invoices","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/how-to-take-legal-action-for-non-payment-of-invoices.html","title":{"rendered":"How To Take Legal Action for Non-Payment of Invoices"},"content":{"rendered":"\n
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How To Take Legal Action for Non-Payment of Invoices<\/h1>\n
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If you run a business, whether a major corporation or a sole proprietorship<\/a>, one of the biggest headaches is not getting paid on time. Accounts receivable are the lifeblood of any operation and when that spigot turns off or even slows down, it can have a devastating impact.<\/p>\n

Understanding your rights to take legal action for non-payment of invoices is an important part of ensuring the viability of your business<\/a>. Below is a helpful primer on how the legal process can help you recover your losses.<\/p>\n

Determine Your Damages and the Likelihood of Recovery<\/h2>\n

Before you initiate the legal process to collect a debt<\/a>, you need to make an important business decision — is it worth the cost of litigation to pursue? As you weigh this decision, you’ll need to know what your damages are and whether the customer can pay up.<\/p>\n

When determining damages<\/a>, you’ll want to calculate all of the unpaid invoices and, if the customer was renting or buying goods or equipment, whether they were damaged in any way. If so, you can factor in repair costs and possibly other damages due to lost income from future rentals (this is more likely if you already have future rental agreements in place).<\/p>\n

The next step is to examine the customer’s financial health<\/a> by analyzing factors like:<\/p>\n