What to do if a client won't pay

What To Do If a Client Won’t Pay

by | Sep 21, 2018 | All Up In Yo' Business, General, Running Your Business

Getting ghosted happens in all types of relationships, not just on dating apps and websites….especially ones when it comes time to pay up!

If you’re not getting paid for a good and/or service you’ve already provided, you’re likely going to get upset and angry. Before reacting based on emotion, take a moment to consider the following factors in your decision making to ultimately make the best choice for what to do next in your specific case.

Several things to consider when attempting to collect on a past due balance from a client:

  1. Is this an honest mistake?
    • If this client has paid every other invoice on time or a little late, could this just be an honest mistake? Have they had a chance in payroll companies or staff that could explain the missed payment?
    • Have you tried sending the invoice via certified mail (with receipt request) as well a friendly email/call to the client directly?
  2. Is it really worth it?
    • It’s important to consider the cost vs. benefit. If your invoice to a client is $200 but the attorney you’re going to hire to try and collect that money costs $400, that’s probably not the best way to handle it.
    • If you decide to hire an attorney or a collection agency, there is no guarantee that this client actually has the money to pay you on top of the fees accumulated for chasing them for non-payment. If they can’t pay, you’re not getting paid at the end of the day.
  3. What are the negative ramifications? 
    • We live in a world centered around reviews (Yelp!, Google, Facebook, etc) and as much as some people don’t pay attention to it, they do matter. It’s important to consider if it’s worth going after a client for non-payment if they’re likely to abuse these platforms for their own benefit making only you look bad in the end.
  4. How can I avoid this from happening in the future?
    • Personally, I always like to put a deadline in the reminders I send out for my invoices. For example, if I’m mailing a certified letter out or emailing the invoice directly to the client, I like to state that a payment is due within 10 days of receipt of this mail/email. If they don’t pay explain what happens next (ie legal recourse for nonpayment).
    • Have your clients pay in advance for your services. More likely than not, this will limit the number of people that are just looking to screw you over in the end. If you don’t want to require a full amount up front for whatever reason, you may also consider asking for a retainer in order to start work. This at least covers the initial expenses you might have.

If you’ve considered these factors, and still believe you have a strong case for why you believe you need to seek counsel or the services of a collection agency, then you as a business owner have that right.

If the attorney is involved in the process, they will likely send out their own letter similar to yours demanding the client pay. In most cases, this is usually enough to get the client to pay up because at this point they know you mean business. If that doesn’t work, the attorney can sue the client on your behave and take it to small claims court (all depends on the dollar amount due vs the claim amount limit in your jurisdiction). The process and results are typically similar regardless of which route you choose – attorney or collection agency.




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