Every once in a while you get that one client that won’t pay up. They either come up with a reason not to pay or start avoiding you at every turn, doing everything they can to postpone payment. Certain clients count on you giving up eventually, and some just want to delay payment for personal reasons.
Whatever the case, here’s what you can do to get paid.
1. Follow the contract
Hence the importance of always having a contract, even if you're providing service for a friend.
Neglecting to write a formal contract leaves you at a huge disadvantage in the case of a client not paying. Whatever you try to impose, they can hide behind the fact there wasn’t a contract in place. And if a client resists or pulls back when you insist on writing a contract… it’s never a good sign.
Of course, we like to believe people wouldn’t be this evasive, but sometimes they are. Always have a contract.
A great advantage of doing this early is that you can set up payment options and milestones beforehand, making it easier to prevent mishaps.
And in the event of a client not following up on what you’ve agreed, you have legal and rightful leverage to make them pay for the service you’ve provided.
It sounds obvious, but as annoying as it is to be persistent, it also often leads to clients paying up.
Call at least once a day. Leave a voicemail if you have to. It’s just important you insist — the client knows they have to pay, and in most cases, they find a way to do so if you insist. Remember, you’re within your rights here, especially if the client is not fulfilling what you’ve agreed upon in a written contract.
3. Be flexible
Although it is crucial to put some pressure when a client refuses to pay, it’s just as important to show some flexibility when they budge.
If what the client needs to pay are different payment options, see what you can do. Even if it takes longer to receive the total sum of what they owe, if it means you can secure payment, you can budge.
4. Offer a discount
As a last resort to secure payment, you can indeed offer a discount as long as you’re not losing your profit margin.
Here comes the importance of working with a solid profit margin — even in the worst case scenario, you have enough wiggle room to come out on top. Charging with a low profit margin just to get work is one of the mistakes contractors make all the time.
5. Take legal action… or almost
So you’ve tried everything and the client still won’t budge. The next step would be the one no one wants — legal action.
However, one of the secrets of this step is that you might not want to take legal action at all, but your client doesn’t know that.
Talk to your lawyer about writing a demand letter to your client. It usually won’t cost you much, so you don’t have to worry about losing money in the process. Demand letters almost always get clients to pay if they haven’t already.
Consider the time and money you’re spending on charging a particular client. If none of the steps above have worked, you only have two more options:
- Take proper legal action and bring the case to court (which will be expensive and take a long time), or…
- Let go of it altogether.
Here, it’s up to you (and your accounting) to determine what the best course of action is, because it’s no longer just about money: it’s about what won’t damage your business. In some cases it might be worth pursuing legal action, in others, not so much.
Just be sure you have that contract set up on the very beginning of your relationship with the client — it’s a guarantee for both parties, and a powerful tool for you if the need arises.
Bottom line? If a client doesn’t pay, don’t panic — you still have many ways to get your money!
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