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When you own a business you count on your customers paying.  What happens if they don’t pay? It can get extremely frustrating when a customer bounces on their bill, and it’s easy to get angry but you have to remember to stay professional!  

Whenever a job is complete, I immediately send an invoice. I also send statements on the 1st and 15th of every month. I find this method reminds clients they have a balance, and we’re not going to simply forget about it. If they haven’t paid by the due date, I send a friendly reminder asking for the status of their payment (people do occasionally forget!).

It is important to have a contract for every job that you do. In the contract make sure you include the scope of work, timelines and when payment is due.  Double check the contract; the client must always sign and agree to these things. Look for the client to send it back, this is great for reference later.

As a last resort you could contact a lawyer and they could write a letter to the client. If worst came to worst you could go to small claims court.  

Some Tips for dealing with Clients Who Won’t Pay

  1. E-Mail: Start with email reminders. It should be a polite email reminder.
  2. Call and Communicate:  If e-mail doesn’t work make a phone call to the person in charge of paying the invoice. See if they are dissatisfied with you work, having cash flow issues or other problems. This will help you in determining how to move forward.
  3. Be persistent with late customer's – email and call.  Don’t be mean but don’t stop asking for payment.
  4. Follow Up: Once you speak with the person follow up with an e-mail.  Put everything in the e-mail that you talked about on the phone.  You could start the email out by saying: Thank you for taking the time to speak with me.  Here is a recap of what was discussed on the phone.
  5. Offer Options – sometimes a customer isn’t avoiding payment they are just facing issues and don’t have the money at this time.  Talk to client to see if you can work something out.  Set up a payment plan stating they will pay this amount each month.
  6. Discount and Settle- Offer a percentage off to the customer. With any luck the client will agree and you will get paid.  
  7. Reach out legally- Sending a letter from a lawyer. Do this as a last resort.  DON’T do this right away.  It will make the customer feel threatened.  

What do you use to keep track of payments? Quickbooks? An in house bookkeeper, or one of the newer cloud based ones? Let us know in the comments!