Dealing with clients that just WON’T pay

We’ve all been there, right?

Whether you’re a business owner yourself, or this is something you deal with in your role job role, it’s likely you’ve come across business no-payers (the construction industry is a biggie for this too!).

So what should you do if this happens? Keep on reading to find out.

Step 1

Make sure you have a really good contract in place setting out

  • What your payment terms are
  • When payment is due
  • What happens when you won't be paid on time, i.e., the ability to stop providing your service, or allowing you to charge interest

Having everything in writing means you always have a legal document to refer back to.

Step 2

If you use a payment or accountancy system or software, I'd recommend having an automatic reminder put in place that can do the work for you.

I'd recommend sending 3 automatic reminders here.

Step 3

Still no payment through? Now I'd follow up with 2 personal emails or messages (whichever your preferred method of client communication is).

This doesn't need to be incredibly formal. In the second message I'd mention having to resort to more formal action if this isn't resolved.

Step 4

It might be time for some formal action.

There are 2 options here:

1) Set up a relationship with a debt collection company (that fits the business). It can cost a bit, they'll take a % of your income

2) Filing a County Court Judgement (CCJ) against them.

I would set that this is a last resort. It is more serious, and doing this will register a 'black mark' against them / their business

To Conclude

Dealing with clients who won't pay does put you in a stressful situation, but following these simple steps should hopefully make the process that little bit easier for you.