Protecting my business from people who refuse to pay invoices

[sheepy_weepy]

Hello, I run a business where we host birthday parties for children. We collect a deposit to secure the date and then the rest of the charges are paid at the end of the party to account for the other part of payment plus the accrued charges.

How do I protect my business from non-payments? Is there a way to force the customer to keep a card on file? How do I get the customer's address if something bad happens and I need to file a small claim?

We had an issue where a customer did not pay on the day and promised us this and that and well you can guess, they didn't pay. There's nothing I can do, I can't run their card because it's not saved and I don't have any ways of contacting them besides phone number and email.

[Donnie-M · Accepted solution]

@sheepy_weepy You can require an address.  I would look at sending an estimate that converts to an invoice upon acceptance and payment of the deposit.  I would make the invoice due the day before the party or day of.  I wish I could give you a better answer, but this is a matter business ethics versus the desire to not say "no" to someone.

I would have a strict deposit policy and paid in full before you do the party.  Think of it like the grocery store, you can't take your food home and eat it before you pay for it.  Restaurants are different as they have a much smaller risk involved, but dining and dashing is a criminal offense, where in your case it would be a civil matter involving a contractual matter.

No pay no party...simple and effective..and don't be afraid to keep a deposit if someone doesn't keep up their end of the bargain.  I would never discount the service you provide, be a professional and be worth it.

[sheepy_weepy]

Okay- so what happens if they add more people to the party day of (which has been happening a lot). That means there are additional charges to be done.

[Donnie-M]

@sheepy_weepy This is a super easy thing to do.  I would put a note in the sale that add ons will be @$x.xx to be paid via cash or credit card at the venue prior to the event, or whatever language you need.  I would take my phone and make sure to pick up a contactless chip/dip reader from square or somewhere like best buy and just collect that payment right there.  Square is very flexible, you can use the point of sale app on your smartphone to take any kind of credit card.  You can take a payment over the phone if you need to.

This would provide you with the greatest protection.  Don't be afraid to say, sure I can add 5 people on.  That will be 55.55 with tax, do you want to pay cash or with your visa/mc?  and then just be silent and wait for their response...if they say, can I pay you afterwards...I can't do that, but I can get the payment now so you can enjoy your party and you don't have to worry about it afterwards, because after all this party is what is really important and I know you are gonna have a great time.

Donnie-M