Darrell R. Zall
dzall@kmksc.com
(414) 962-5110
“It is too small to pursue, or it is the cost of doing business” is the typical feedback in response to our inquiry as to why a particular organization does not pursue an outstanding account receivable. Although that logic may be accurate if placing on an hourly basis or considering legal action, it should not be part of any analysis in determining when to “write off” an account. Any unpaid receivable is lost revenue to your company—whether it be the cost of materials, the time and effort to produce and sell the goods or the lost opportunities in pursuing profitable business.
When a customer, contractor, tenant or even a business partner owes money, Wisconsin Small Claims Court offers a streamlined and cost-effective way to resolve many disputes without the expense and complexity of traditional litigation.
Wisconsin Small Claims Court provides several advantages:
- There is no minimum dollar amount required to file a lawsuit (there are certainly practical considerations including the court filing fees and service fees, along with evaluation of the collectability of the potential defendant);
- Faster resolution (cases are typically resolved much more quickly than traditional lawsuits);
- Lower costs; and
- Enforceable judgments (regardless of a small claims account, the judgment provides all the legal tools available on which to collect upon the outstanding balance).
Under the current Wisconsin statutes, with certain exceptions, civil actions in which the amount claimed is $10,000.00 or less can be filed in Wisconsin Small Claims Court. A recent bill has been signed increasing the limit to $15,000.00 as of January 1, 2027, and increasing each year thereafter through January 1, 2029 to $25,000.00. With the recent legislation, the depiction of the court as being inferior or secondary is no longer apropos. Despite the accessible forum and economical venue, it does require expertise in presenting your case before the tribunal. Any decision by the court will be final and if unsuccessful, your claim may be barred by res judicata or claim or issue preclusion.
In evaluating your open accounts receivable, our preferred inquiry regardless of the amount, is “Are there any legitimate reasons why the balance has not been paid?” If that answer is no, demand should be made, and all efforts should be utilized to liquidate the unpaid debt. As a practical and realistic matter, litigation of the debt may not be an option (depending upon the size and potential defects in one’s case). There are avenues to pursue small amounts that will give your company the opportunity to recover and to reduce its open and unpaid accounts receivable.
If you would like to discuss small claims procedures, please contact KMK Attorney Darrell R. Zall at dzall@kmksc.com or (414) 962-5110.