Business dealings can only go two ways. You can either get paid for your products or not. Sometimes despite your efforts to provide an easy and efficient system for online invoicing, there are certain customers who refuse to pay. In fact, freelancers all over the world united to support the site “The World’s Longest Invoice” where you can report clients who bailed out on you. Best (popular) advice I was ever given, was “get it in writing”, and be sure that your clients submit an order, or a purchase order to begin the work – especially true and helpful in service based businesses. This step will also clearly outline expectations for both sides, and can avoid surprises during the project and delivering the project.
But what if you have followed all the proper processes, and have done work, delivered the invoice, and you still have not received payment for work you have completed or products you have delivered?
Here are 3 tips to keep in mind:
1. Be Courteous
Dealing with clients who don’t pay you is like doing a balancing act of being respectful, relentless, and resilient. Whatever approach you use—phone, email, snail mail, or personal visit—you need to treat your client with respect. It shows sincerity and professionalism on your side. Be courteous in the way you talk to them so as not to intimidate them or scare them away.
2. Follow up, often
You also have to be relentless in your follow up. Start by sending emails. If they don’t reply then send a collection letter to their home or work address. If they are still not responding, give them a call. If they refuse to answer your call then call the accounting department of their company to ask for help. If this is still a dead end then you have no choice but to take it to court. You can go to a small claims court to settle business disputes even without a lawyer.
3. Be Resilient
Lastly, you need to be resilient. Be firm with your terms but also be flexible for negotiations. If your client requests for extended terms, carefully consider his proposition before saying yes or no. Be wary of clients who do not keep their word. Ask them to do something risk-free (i.e. from your end) like writing a promissory note. If they can’t do something that simple then you can throw negotiations outside the window.
Encountering clients who do not pay are part of the risks involved in your business. It doesn’t happen all the time, but it is inevitable. Asking for up front payment is the best way to avoid it. However, if you choose not to, make sure you have a procedure you can follow for collecting payment, although yes, it is uncomfortable to deal with, it’s business, you have to, and it will get easier each time.