You’ve sent out the invoice. Then a reminder. And then another.
Sooner or later, it becomes apparent that you’ve got a client who, it appears, has no intention of actually paying you for your time or products.
There’s nothing quite like the particular flavour of frustration that comes with having to chase a client for an invoice, especially if you’ve already done the work. Besides the sheer cheek of them trying to get something from you for free (after all, try that at a brick and mortar store and see how far you get!), there’s a sense of frustration, because when it comes right down to it, what can you do?
You’ve got four main options:
- Let it go.
A lot of SMEs opt for this, taking the financial loss because they’re not sure what to do, or because it’s a relatively small amount, or because they just don’t have the time to chase the money down.
But sometimes this simply isn’t feasible, given the amount of money or your cashflow situation. And even when you could conceivably take the hit, you still shouldn’t have to. Your work is valuable, and you deserve to be compensated for it! That’s why we really encourage you to stick with the process rather than rolling over. The first step in sticking with it? It’s to…
- Get creative when it comes to contacting them.
Some clients genuinely act in bad faith and don’t want to pay up, but others are just that disorganised. Maybe they’re going through a transition in their business, maybe the email for accounts got changed and they forgot to tell you, or maybe there’s someone bottlenecking the payment process. A lot of circumstances can add up to make a payment go missing, so bear this in mind before you start thinking up sternly worded emails demanding payment.
So try thinking about creative ways to get in touch with the company. If you’ve been emailing accounts so far, see if you can get in touch with someone higher up the food chain — many companies have their contact information on their site, but if they don’t you can often do a bit of sleuthing on LinkedIn and find a way in.
Similarly, try contacting the company via Facebook or Twitter. No need to go public with it at first — a private message will do — but sometimes getting the message through another channel can make all the difference.
Don’t forget about calling or sending a physical letter. If you can’t find an address on their website, try looking their business records up via Companies House, a lot of times there’ll be a physical address for one of the directors.
- Consider mediation.
If you are able to contact your client but they still won’t pay, then it might be time to get a mediator involved. The Ministry of Justice has a roster of licensed mediators who can help you and your client work out an arrangement for making payment and talk through any blocks or disagreements that are holding things up for much less than the cost of going to court. While this only works if both parties are willing to come to the table, it’s still a better option than jumping straight into a legal complaint.
- If all else fails, start looking into legal remedies.
Often by the time you get to this point, the client will have either paid up or made arrangements to do so. But if you’ve tried everything else and still can’t get a response, it may be worth getting some legal counsel involved. HMRC provides advice about legal next steps (including filing a Small Claims Court N1 form for amounts under £10,000, or a statutory demand for amounts greater than that), but it’s always a good idea to get a professional opinion before you spend the time and money making a claim.
Three things you can do to help make sure clients pay you on time and in full going forward:
Once you’ve been caught in non-payment limbo, you tend to get extremely motivated about making sure your clients can’t ghost on you. While we’ve spoken at length about how to get your invoices paid on time, you should also remember to:
- Cover your legal bases right out the gate.
While no one wants to go into a relationship with a client feeling suspicious, it’s much better to set clear expectations about your working relationship right from the beginning. You can only expect people to comply with your payment policies if they know what they are, so make sure you’re having people sign thorough contracts before you do any work with them. 99 times out of 100, you’ll never have to reference it again — but when you do, you need to know that you’ve got your legal ducks in a row.
- Make it as simple as possible for people to pay you.
Do you only accept cheques? Require people to click through a bunch of things or set up a new account to pay you? If so, chances are people are going to be resistant. Make it as absolutely simple as possible for clients to pay you, provide a number of payment options, and ideally, use a system that automatically reminds clients about outstanding payments. (Like Clear Books!)
- Keep it professional, no matter what.
Whatever you do, keep a record of all of your contact with your late-paying client. This not only ensures that you have any information you might need should it come to a legal issue, but it also allows you to make reference to the timeline in your correspondence with the client. Sometimes seeing all the notices stacked up together can be just what you need to get some action going on their end.
And as tempting as it might be to get angry in your correspondence, keep things professional. Chasing up payments is frustrating, sure — but getting nasty isn’t going to make people want to pay up faster, and you don’t want to end up with a harassment complaint.
The truth is, you’re probably going to get burned by a client sooner or later. But by taking some common sense precautions and keeping on top of your contact with clients, these types of issues should be few and far between.
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