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You may run into an issue where a client doesn’t pay your invoice on time. What do you do when this happens?
Running a business is tough. There are all sorts of things to do that won’t make you any money. One of those is chasing up invoices for some clients.
The majority of clients I have are great. They pay as soon as the invoice is sent out, or they pay a few days later. Usually, they will let me know ahead of time that they’re simply out of the country or I’ve sent the invoice on a day that is a holiday for them, and I’m understanding. I’ve set up a good relationship with them that I know they will pay when they say they will.
However, there are times I’ve had where clients haven’t paid their invoices* right away. They’ve needed consistent nagging. It gets annoying, and we really shouldn’t have to deal with it as business owners.
Here’s what to do when a client doesn’t pay your invoice on time.
Email with a reminder about the invoice
Follow up the day after the invoice was due to find out why it wasn’t paid. There are times that a client has just forgotten about the date, and they end up paying as soon as they get a reminder. We shouldn’t have to remind but people are human. If it’s a one-off, it’s not too bad.
If they don’t reply within 24 hours, it’s worth emailing again after another 24 hours. I like to give businesses time to respond.
When they continue to ignore, you need to find another way to contact them. Did they give you a phone number? I always ask for phone numbers now to make sure I can contact a client should I need to. A good client won’t have a problem sharing their business phone number.
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Send a letter by registered mail
Do you have the client’s physical address? If you do, then you can use that. It’s time to send a letter via registered mail. This way they have to sign for it.
The letter needs to make it clear that you have tried to get in touch with them about the invoice they haven’t paid. You need to state clearly how much is owed, and a deadline to pay it. If they don’t pay, then you will take them to collections for it.
If you don’t have their physical address, you can do this through email.
Do not take more work when a client doesn’t pay your invoice
It can be tempting to stick to a contract that you have in place. After all, you don’t want anything to come back on you. However, you need to immediately stop work when your client doesn’t pay your invoice.
This also applies if the client gets back to you and promises an invoice will be paid by a date in the future. You can make it clear that no work will be done until the invoice is paid. The due dates will need to be pushed due to their inability to stick to the agreement that was set.
If you do work without the invoice being paid, you’re setting the tone for the future. The client realizes that they still get the work, even though they don’t pay. This creates a bigger problem in the future.
Get rid of the client once they do pay
This one is optional, and it will depend on the relationship that you have with the client*. Let’s say you’ve had this same client for three years and this is the first invoice they missed. This suggests that something happened and you can probably keep working with them once the invoice is paid. You want to make sure the next invoice is paid, though.
If it’s a new client, it’s set the tone for the future. Now, if the client responded immediately to the first email and paid right away with an apology, it suggests that date slipped their mind and they are still a good client to work with. If it’s taken multiple attempts to get hold of them, you’ll want to drop the client and find someone more reliable.
This is going to be a case-by-case situation, though. I’ll leave you to figure that out.
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What do you do when a client doesn’t pay your invoice? What steps have you taken in the past? Share your thoughts in the comments below.
