1. Stop extending more credit
The most common mistake is to keep shipping or keep working in the hope that the customer will catch up. Unless there's a firm, written payment plan, more credit usually just makes the loss bigger. If you have the right under your terms to suspend performance, use it, and say so in writing.
2. Get your paperwork in order
Pull together the signed contract or credit application, your terms and conditions, purchase orders, delivery or completion proof, invoices, statements, and the emails about the balance. Check for a personal guaranty, an attorney's fee clause and a late-payment interest rate. Those three things often decide whether a case is worth bringing.
3. Put the demand in writing
Send a clear written demand with the amount owed, what it's for, and a firm deadline. Under Massachusetts law, statutory interest on a contract claim runs from the date of breach or demand, so the letter can have legal value as well as practical value. Keep the tone professional. If the dispute ends up in court, the judge may read it.
4. Look out for "disputes" that appear late
A customer who accepted the work without complaint for months and suddenly finds defects when the invoice comes due is a familiar pattern. Write down when any complaint was first raised. Late, pretextual complaints undermine the defense, and in some cases support a Chapter 93A claim.
5. Watch your lien deadlines
If you supplied labor or materials for a construction project, Massachusetts mechanic's lien rights have strict notice and filing deadlines measured from your last day of work. On public projects, payment bond claims have their own timelines. Missing one of these deadlines can't be fixed later.
6. Find out what they own
Check whether the customer owns real estate, whether it's in good standing with the Secretary of the Commonwealth, and whether other creditors have filed UCC liens or lawsuits. A customer who is clearly still in business, with a building, trucks or other customers, is usually collectible.
7. Know when to stop waiting
When the deadline in your demand passes without payment or a credible plan, waiting usually helps only the debtor. A lawsuit with an attachment request on file changes the conversation quickly. At that point you need a litigator, not another reminder letter.
Don't: threaten criminal charges to collect a civil debt, contact the customer's own customers to embarrass them, or post about the dispute publicly. These can expose you to claims of your own and hurt your case.
If a customer owes you a significant balance, send me the invoices and the contract. See also business debt collection.
This article is general information about Massachusetts law as of its date, not legal advice for your situation.