So it finally happened, you got stuck with a non-paying client. This is probably one of the worst aspects of being an entrepreneur. You no doubt rely on income from clients to pay yourself and cover overhead expenses, and when a client does not pay, this can impact the financial state of your company. Unfortunately, you can’t always control when and if clients pay you. However, there are things you can do to recover money for services rendered.
1. Do not ignore the problem
Understandably, you want to retain a good relationship with all your clients. This results in repeat business and helps your business thrive. But if you send an invoice with a clearly stated due date and the client ignores the invoice, take action. You worked hard and deserve to be compensated for your time and effort.
2. Contact the client
The idea of confronting a client about a past due invoice might leave a bad taste in your mouth. But hey, nobody ever said running a business would always be easy. Contact the client as soon as an invoice is past due. Send a payment reminder by email or mail. In all likelihood, the client simply overlooked the invoice, and once receiving the second notice, the client may quickly pay. Always be courteous and professional, and never assume that the client is purposely ignoring you. Like you, he’s probably swamped with work.
3. Offer assistance
Never make a client feel bad for not paying an invoice. Every business – large and small – can run into hardships. If a client does not respond to a second invoice or an email, call the client on the telephone. Ask if you can assist the client in any way. For example, the client may need a payment extension, or because of cash flow issues, the client may need to spread his payment over several months. Recognizing their financial hardships and yielding to the client’s current financial needs is excellent customer service. This creates a positive impression of your company, helping you retain their business.
4. Accept the inevitable
Unfortunately, you will deal with a few clients who simply refuse to pay – it is part of any business. Anger is an understandable emotion, but don’t let it get the best of you. Calling up clients and yelling is not the way to handle the situation. You have a choice – either let the issue go and take a loss, or take further steps to collect payment. Depending on the size of the debt, consider working with a debt recovery company like cavalry portfolio services. These professionals can take over collection attempts, usually in exchange for a fee or a percentage of the debt. They know the best ways to approach the situation, plus this removes a burden from your shoulder.
You will deal with all types of clients when you are in business for yourself. But fortunately they are plenty of tips and tricks to help you deal with a non-paying client.
Article contributed by Jenna Smith