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Is This Standard Practice?
As a self-employed bookkeeper based in Ontario, Canada, I’ve encountered a challenging situation with one of my clients, who accumulates over $1,000,000 in sales annually. Recently, one of their customers racked up a $5,000 balance and subsequently cut off all communication. Despite our repeated attempts to reach them over the past few months, we haven’t had any success. My client has asked me to phone this customer daily, yet there’s been no response. Now, they’ve requested that I visit the customer’s office without prior notice to attempt to collect the payment. I’m reluctant to proceed with this approach. Is this a common practice? From my research, it seems inadvisable. Am I justified in declining this request?
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One response
It’s understandable that you’re feeling uncertain about this situation. As a self-employed bookkeeper, it’s important to maintain professional boundaries and ensure you’re acting ethically and within legal frameworks. Here’s a detailed breakdown of your predicament:
Is It Normal?
Customer Non-payment and Ghosting:
– Unfortunately, customers defaulting on payments and becoming unreachable is not an uncommon issue, especially in business dealings.
– Companies with high sales volumes, like your client’s, often encounter delinquent accounts or clients who avoid communication after accruing high balances.
Frequent Contact Attempts:
– Initiating regular communication attempts is a common practice to address overdue invoices.
– However, it’s typical to limit these attempts to professional channels like emails, phone calls, and official letters.
In-Person Visits:
– This is less common and can be considered intrusive or even potentially harassing if not performed cautiously and appropriately.
– Many businesses will first exhaust all other communication methods before opting for personal visits, and these are usually conducted by authorized personnel or collection agencies.
Should You Refuse the Request?
Professional Boundaries:
– As a bookkeeper, your primary role is financial management and advisory. Personal visits for debt collection don’t typically fall within your professional responsibilities.
– Visiting clients unannounced may place you in uncomfortable or potentially unsafe situations.
Risks and Ethics:
– In-person collections might violate privacy laws or contractual agreements.
– It might also affect your professional reputation if the visit escalates negatively.
Legal Implications:
– In Ontario, collections are typically handled by licensed collection agencies.
– Unlicensed debt collection efforts can risk both legal repercussions and the business relationship.
Recommended Actions
Express your willingness to assist in more conventional ways of handling receivables.
Suggest Alternative Solutions:
Propose exploring legal action if justified by the debt amount and client relationship history.
Document Everything: