What to do when a client doesn’t pay your invoice



What to do when a client doesn’t pay your invoice

What can you do if as a freelancer or small business owner your customer refuse to pay your bill? Learn what you can to do prevent late invoice payments when people delay or refuse to pay.

In an ideal world, all your clients will pay their invoices within your payment terms. But it’s not an ideal world, and sometimes you may come across a late or non-paying client.

So what can you do when someone doesn’t pay your invoice on time or simply refuse to pay altogether? Here are some tips.


Practice good credit control habits

The first rule of handling bad payers is prevention. If you practise good credit control habits, such as setting out your payment terms, and ensuring your client has a copy of them before you start work, it makes it harder for them to renege on payment – especially if their tardiness is simply down to poor financial management on their side.

It also makes it easier for you to chase payment from them and the clients who are just wilfully missing your payment deadline.


Chase invoices politely but persistently

Once an invoice is late, start chasing. Find out the best person to speak to and email to enquire when payment is due to go out. If they don’t reply, or they miss the deadline they reply with, call them. (Always follow any call with an email to them confirming what was agreed so you have a record.)

Be persistent in your chasing, but always be polite. Rudeness isn’t going to get your invoice paid any faster, and could even lose you a client.


Go higher if you have no luck

If your invoice still isn’t any closer to getting paid, or the person you’re speaking to doesn’t have answers, don’t be afraid to go higher. Either speak to someone more senior in accounts, or return to the client who booked the job (or their boss).

Whoever you speak to, be polite but firm and ask for a date by which your payment will go out. As before, always follow up with an email confirming what has been agreed.


Give notice of court action

If you’re not getting anywhere in chasing your money, or your client consistently misses the deadlines they give you, send a polite but firm email or letter giving them seven days notice to pay before you initiate court proceedings to recover your money. Your email should carefully worded and should include penalty for late payment or interest.


Add a late payment charge and interest

As stated above, once an invoice has passed your payment terms you can legally add late payment interest to it. You can also make a fixed late payment charge to cover your costs of recovering the debt.

(If you are adding a late payment charge and interest to an unpaid invoice you will need to send a new invoice to your client showing this.)

You don’t need to threaten court action to add these charges to your invoice – you can include them once your payment terms have been missed.


Take court action

If invoice payment still isn’t made, at the expiration of the notice period, you can approach your lawyers to write them and possibly initiate court proceeding on your behalf. My advice before embarking on this is to sit with your lawyers to estimate the cost of the court process with respect to the invoice amount and determine if the court action is  worth it.


Keep on top of your finances

Hopefully, this will all be a theory lesson that you’ll never need to implement! But if you are unlucky enough to work for a bad client, you now know your rights, and will hopefully get your rightful payment without too many dramas.

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