We are all well aware that some clients are more willing to pay for your services than others. However, some clients don’t pay their bills/ invoices, and this is a huger problem many SME’s face regularly.
Why does this happen? Why do clients continue to not pay their invoices? Having a client not paying can be very frustrating, however you need to be sure you take the correct procedures in order to deal with this client, and ensure this doesn’t happen again.
Discuss all Cost and Payment Terms Beforehand
Putting your expectations of cost and payment terms before you’ve even begun working together will ensure you have a strong and healthy relationship. This will allow you to answer any questions they may have from the start and understand each-other fully when it comes to payment.
Write Up a Business Contract
A business contract should have details about the job description, payment information and payment schedule. This will help clients feel comfortable that you will hold up your end of the deal. You will also ensure they have the correct payment details. Therefore, if you don’t receive a payment, you can follow this up, and let them know the payment method is clearly stated in the business contract.
Once you’re aware that you haven’t received a payment from a client, it’s time to stop working on their project until further notice. Pause the project for that particular client, and make sure to spend your time on a project for a client who has paid for your services. Then, that particular client may notice there’s something wrong and send a payment through as soon as possible. If this happens, be sure to remind them that you expect payments to be made on time.
If all the above steps have been taken, and no payment has been made, it’s time to take action! Once you’ve stopped working on their project and emailed them, informing them you haven’t received their payment, it’s time to take action. Consider billing your clients on the time it’s taken for them to pay you. Send them a notice informing them of the date you will take legal action alongside companies such as HJS Recovery. This will make sure you are advised and supported fully if you haven’t received a payment from your client.
Although it’s not fun getting third parties involved in your business, however it may be necessary if your clients are refusing to pay for the service you’ve provided them.
Know Your Rights
You don’t need to have a lawyer on hand for this matter, however, be sure to have a referral in case you need to use one. Make sure you are aware with lawyers who specialise in handling cases similar to yours. Educate yourself on your rights and make sure your client is aware of your position on this matter.
You’re Not Alone
Remember that you’re not alone in these situations. There are a number of other business owners like yourself who have clients which either pay late, or refuse to pay for their services. Be sure to seek advice if such cases are to arise and act accordingly.