Any time your client agrees to pay you for a service or item, they are entering into a contract with you for that sale.
You uphold your end of the sale, and you expect your client to pay you and fulfill the terms of the contract.
Unfortunately, not all clients are honest about their ability to pay or they have fallen upon hard times and are no longer able to pay. Situations like these may leave you wondering about your options.
Thankfully, you don’t have to go it alone. Read on to learn what to do when a client doesn’t pay.
Send Out Reminder Letters
When it comes to collecting past-due money, it’s best to start off in a friendly, non-accusatory manner.
Opt for a letter reminding them of their missed payment date. It’s possible that they forgot to pay and just need a reminder.
One type of reminder letter you could send out is called a Dunning Email. These emails let customers know what they owe and welcome the customer to contact you to work out how their bill will get paid.
Read more about Dunning Emails before sending them to make sure that they’re as effective as possible.
Don’t Threaten Your Client
It can be incredibly frustrating when a client doesn’t pay what they owe, even after you send them a reminder letter.
That does not mean, however, that you should be rude or made threatening comments toward them. Certain threats or abusive language are illegal and could land you in some serious hot water.
In situations like these, it’s best to be firm about their obligation to pay.
You can tell them what your next steps will be if they do not pay. Make sure to follow through on those steps and adhere to the same procedure for other clients in the future.
If you feel like you’ve done everything you can on your end and given your client sufficient time to make good on their payment, then it’s time to move on to legal remedies.
This can include taking your client to small claims or justice court and getting a judgment against them for the amount of money they owe you.
In situations like these, it’s best to hire an attorney to help you obtain the judgment and enroll it so it can be enforced.
Knowing What to Do When a Client Doesn’t Pay Is the Key to Success
No one expects their clients not to fulfill their end of the bargain, and missing out on payments can have a huge financial impact on your business.
The best way to recover your money is to be smart about what to do when a client doesn’t pay. Give them an opportunity to make good on their payment, but if they don’t follow up with you, it’s time to move on to things like judgments and liens.