Sometimes, even if you think you’ve done your due diligence, you’ll run into a client who had you do work that they have no intention of paying. But most of the time, the problem is something else. Often, it can be traced to poor cash flow and poor planning. Thankfully, if you react carefully you can usually get them to pay you.
Don’t Do More Work
If you are working on more deliverables for the client that is not paying, you’ll want to stop doing any more work for them until you make fair payment arrangements. If you keep working, they’re not going to be incentivized to pay, and you’ll just end up with them owing even more that they obviously cannot afford to pay.
Send Reminders
Whenever you create an invoice, make it so that it sends them reminders every three to seven days automatically. If it’s legal where you live, you can add an automated late fee to the invoice too. That way, not only will they get the automatic reminder but they’ll also see their bill getting larger.
Open Multiple Lines of Communication
Don’t just communicate via email; resort to sending bills in snail mail and sending SMS messages too. That way, they can see that they can communicate with you in many ways. You can also phone your customer to remind them when the bill is due and leave a message with alternative plan options.
Avoid Making Threats
While it is infuriating when you’re not paid – after all, you’re likely counting on that money – it does happen. It’s illegal for you to make threats to the person or to tell them you’re going to do something such as contact their employer. You also cannot legally out them to the world without liability concerns, so be careful.
Give Them Payment Options
When you realize they’re more than 30 days overdue paying, one way to get them to take notice is by sending them a one-time option to make payments on the amount owed. One tactic is to let them pay 75% of the bill, and you’ll zero it out if they do it by a certain time.
Sell Your Unpaid Invoices to a Bill Collector
You can find a bill collector who will buy the bills from you and then collect the unpaid bills. You can do this if you have iron-clad contracts and proof that they owe you the money. A bill collector may pay from 30 to 70 percent of the invoice, or they may take them by offering you half of what they collect.
Seek Legal Remedies
One way to deal with an unpaid bill is to hire an attorney who will work for you only to collect the money. In some instances, you may take them to the small claims court too. There are often many ways you can deal with this, including putting a lean on their property if you can prove they owe the funds.
Change Your Onboarding Process
If you have an issue with one client not paying, consider checking your onboarding process to ensure you get only paying clients from now on.
Create Legally Binding Contracts with Your Clients
Ensure that every single client you work with signs a contract with you, stating both of your responsibilities. Get an attorney to help you make legally binding contracts that work with your type of business.
Whenever you have an issue with a client, always look at your contract before you take any steps. Then, when you communicate with your client, bring up the contract so that they’re reminded of it, but always do it in a non-threatening way. After that, add methods to prevent the problem from occurring again to old contracts. Any repeat customer who has trouble paying on time needs to start paying upfront.