Most businesses, from time to time, will deal with clients who simply do not want to pay. They have benefited from your work and they have shown no indication that they were not happy with the service, but still, the invoice goes unpaid.
This can drag on and on indefinitely if you let your clients get away with not paying, and that would be really bad for your business, so it stands to reason that you need to take action and make these clients finally pay their bills. Here’s how to do that:
Send a reminder
Many clients just need a nudge to pay up, so if you send them a reminder letting them know they have passed the payment date, then it could be all you need to do to get them to settle the bill.
Offer a discount
If a client is not playing ball after several reminders, then you can offer to discount their bill by X percent if they pay within X days. If you prefer the stick approach, you can also inform them that they will be charged a late fee of X every day until they pay up. Often this will see some movement in the money department.
Talk to them
Asking a client why they are not paying up can sometimes be useful. Often they are having cash flow issues which if they let you know about them, you can come to some arrangement on, which means you won’t have to worry about constantly chasing them up.
Sometimes, they are not happy with the service but haven’t bothered to mention it, so by asking you can rectify the situation and get paid.
Always try to have an open dialogue with your clients if you can as this will mean you are less likely to not get paid.
As a creditor, you always have the option of legal action to recover any monies owed to you. You could go to court and hire a process server to serve papers on any clients who have not paid up after a set amount of time. However, it is often a good idea to leave out legal action as a possibility until you have tried everything else because it can be expensive and time-consuming for you and your business.
Use an invoice factoring service
If you’re not getting anywhere with the client, and they do not look like they are going to pay up any time soon, as well as legal action, you could always look into invoice factoring.
Invoice factoring firms will buy your invoices from you at a discount so that you no longer have to pursue the client for payment. It can work well if you need the money in a hurry, but as we mentioned, you will not be paid the full value of the invoices so think carefully.
Getting your clients to pay up is not always easy, but if you follow the advice above, at least the process will be relatively simple.