Having a client refuse to pay makes it difficult for a business owner.You can try to make the client hold up their end of the bargain.It is important to communicate effectively in order to convince clients to make payments.You can take legal options if this doesn't work.
Step 1: The day after the payment is due, you can call or email your client.
Send a friendly reminder to your client.They may have lost the invoice.You can show them you are aware of the matter by reminding them.Say, "Hello, this is Charlie with Willie Wonka's Chocolate Factory."I am calling to let you know that your bill was due on May 29th.Be persistent.Contact the client every day if you can't get a hold of them.
Step 2: The client can be reached through their office or colleagues.
Some clients won't listen to your calls or emails.You should think of other ways to reach the client.You can reach them through someone else if you meet them in person.If your client's office is near you, stop by and talk to them in person.Messages can be left with the senior executives if you worked for the company.
Step 3: Send more than one invoice until you get a response.
Once the bill is late, send the invoice.You can send it every week or month.Sending the invoice through multiple communication methods will make sure the client gets it.Send the invoice via email and mail.Call the client to leave a message.When the work is done, some contractors forget to send their invoices.Send it right away since it can lead to payment issues.
Step 4: Discuss non-payment with the client.
If you can reach the client, talk to them.Ask them why they haven't paid the invoice yet.Understanding why clients refuse payment can help you solve the problem.The client should be told, "I noticed you missed a payment."Is there a problem with my work?
Step 5: Speak to the client in a calm manner.
Before you contact your client, take some time to breathe and relax.Call them when you are ready.Give them the facts about the invoice.If you listen to the customer carefully, you can respond in a positive way.This will make a tough situation ugly, so don't yell or shout.I am sorry you are having a hard time.I know the economy is hard.Let's come up with a solution that will work for both of us.
Step 6: Accurately respond to threats.
In order to dodge payment, they may act with hostility if reasoning with the client doesn't work.You have the legal right to pay, so don't get angry.Continue to respond with logic and reason.A client may threaten you with a negative review on social media.You are still obligated to pay your bill even though I can't stop you.
Step 7: If finances are an issue, work out a payment plan.
Sometimes clients don't have the money to pay.It's worth it to work with them instead of damaging your relationship.It is possible to turn a client into a loyal customer.You can say, "I can put your account on hold this month until you're ready to pay."How does $50 at the beginning of the month sound? Remember that getting paid eventually is better than not being paid at all.
Step 8: Discuss service adjustments you can make to make clients happy.
Some clients may complain about your work.If there is anything you can do to address their concerns, listen to them.You can come up with a solution to the client's complaint.If you ask, "Which parts of my work are you dissatisfied with?" you might explain to them why the work was done that way or make minor adjustments to it.The scope of your work is important.You don't have to do more if you give the client what they asked for.
Step 9: If the client still refuses to comply, explain your payment policies.
Your client agreed to your operating policies if you covered your bases.They must follow any legal documents they sign.They may withdraw their objections if you remind them of the policies.After the 30-day trial period elapsed, you agreed to pay the full amount.
Step 10: Send a notice of legal action to the client.
Any of your regular correspondences with the client can include the threat of legal action.Unless you were able to make payment plans with the client, it is best to wait until the payment is late.For example, you may include in an email, "I reserve the right to contact a lawyer in cases of breach of contract and payments more than 90 days late."It's a good idea to contact an attorney.It will cost about $100 to have an attorney write a letter for your client.
Step 11: If it takes too much time to seek payment, choose a factoring service.
You sell your invoice to a third party.They pay you less than you are owed.You don't have to worry about it again once you sell the invoice.Factoring is a way to recover money if you don't have the ability to chase a client for payment.There are reviews from other customers on various factoring companies.Information about factoring services can be found here.You can get up to 75% of the invoice.
Step 12: If you want someone to collect on your debt, hire a debt collector.
Debt collection agencies don't buy invoices from you.They are more like bodyguards.Debt collectors take on late bills.They send reminders to the client until payment is made.Before agreeing to use a collection agency, you should read the service details.Fees are charged by agencies for their services.If the cost is worth it, it can be as high as 30% of the money recovered.You might be able to offer your client a discount as large as the agency fee.You can get them to pay without resorting to legal action.
Step 13: If you want to recover the full payment, file a court claim.
It is possible for court action to force stubborn clients to pay up.The type of court you use depends on how much money is owed to you.Even if you win the case, you will have to pay the lawyer's costs.It's a good idea to file a complaint in small claims court.In most locations, you can recover up to $10,000.You don't need a lawyer in small claims court.You can win your case if you have documentation of your work and your client's agreement.Getting a lawyer for a large amount of money is worthwhile.
Step 14: To find a history of non-payment, research clients.
You can start your search by typing the client's name into an online search engine.Look for news articles, consumer reviews, listings on websites such as the Better Business Bureau, and any other sources that may mention business dealings.To gauge the trustworthiness of a client, talk to other contractors or businesses in the area.If you are dealing with an individual instead of a business, you may not be able to find any information.If you don't trust the client, you should move on to other clients.
Step 15: Before agreeing to work, draw up a contract.
If you run into payment issues, a contract is very important.Before you agree to do anything, meet with the client.Make sure everyone knows the scope of the work and how much the client will pay for it.Put the information on paper and have everyone sign it.You can communicate any changes in the project's status if you stay in touch with the client.
Step 16: It's a good idea to pay up front to avoid issues.
When the work is done, contractors are more likely to have payment issues.It's helpful to request that a client pay you in advance.The work can be broken down into stages of payment if the price is high.When a contractor works on a home, they may ask the client to pay half the cost up front and the other half when the work is done.If a client doesn't pay for a stage of the work, you have the option to stop working on the project.
Step 17: It's a good idea to have a plan in place for late payments.
Do you have a strategy for dealing with non-payments?You should find ways to protect yourself from missed payments if you have had a client refuse to pay in the past.You can decide when to involve legal services and develop a strategy for contacting the client.You can issue a payment reminder when the bill is 30 days late and a second warning after 60 days.
Step 18: Institute late fees are used to encourage prompt payment.
Make sure your clients agree to it first.There is a penalty for missed payments.Since a late fee means more cost to the client, they may be more willing to be prompt with payments.Since this can drive clients away, you don't want the fee to be too harsh.You might agree to charge a fee for every month that a payment is late.You should include any late fee agreements in your contract.