Dave Says: Keep things friendly, but reach an understanding

Dear Dave,

My husband and I own a small business. We have a large account providing wholesale items to a client. Our original agreement was to work on 30-day payment periods, but he is three months behind on the bill. We live in a small town, and the businesses here stick together and help each other out, so we don’t want to ruin the relationship. Do you have some advice on handling this situation?

– Hollie

Dear Hollie,

From what you said, I assume this guy’s not a cheat or anything like that. He’s probably like a lot of small business owners in that he’s just a little disorganized. Still, you need to correct this behavior.

If it were me, I’d go to his office and have a friendly, sit-down meeting about things. There’s no reason to start throwing threats around, but he needs to understand you can’t be his bank. You’re a small business, too, and you need your money.

Ask a few questions, and find out what’s really going on. Then, let him know it will help matters if he can get current on the bill by a certain date. You’ve provided goods and services, and he owes you money, so this is a fair request. You might think about adjusting your payment agreement to reflect that once he’s current, payment must be within 10 days of delivery from that point on.

If that’s not workable, you may have to switch to a cash-only basis—where payment is due on delivery. And if none of these options work, well, you should probably tell him to find another supplier.

— Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.