As you go through business, you will occasionally encounter clients who refuse to pay you. For whatever reason, they’re unwilling to stump up the cash necessary to pay their bills. And that can leave you seriously out of pocket.
If somebody does refuse to pay, though, what should you do? Here we take a look at some dos and don’ts.
Do Provide Them With A Gentle Reminder
If it’s a client’s first offence, do provide them with a gentle reminder, telling them that they need to pay and that payment is overdue. Many companies allow a two-week grace period in situations like these before they start applying fines and penalties. In many cases, clients fail to pay because of innocent oversight on their part.
Don’t Accuse Them Of Anything
When somebody won’t pay you, it can bring up all kinds of emotions. If possible, try to avoid accusing anybody of anything. This type of behavior can backfire and actually make it less likely that they will pay you on time.
Do Help Them Pay
In some cases, clients require help to pay. So, as a business, you can provide them with easy payment facilities so that they don’t have to fill out lots of forms or contact their bank.
You can also change the way that you want them to pay. If they are genuinely struggling financially, they can offer options like pay 50 percent now and then 50 percent the following month, plus some interest.
Don’t Just Focus On Approaching One Person
If your client is another company, try to reach out to more than one person. Sometimes, the person assigned to deal with your invoices and payments might be on vacation and unable to process them. Asking around can often resolve the issue quickly and ensure that your clients pay you on time.
Do Make Payment Terms Simple To Understand
Sometimes, customers won’t pay you because they don’t understand when payments are due. If your breakdown is too complicated, their eyes will just glaze over and they’ll put your invoices to the bottom of the pile.
On your invoice, put down things like the due date, the amount owed, and what may happen if your client fails to pay. Expressly mention bailiff services if you use them as these can offer additional incentives to pay.
Do Use Invoice Factoring Companies
If the cost of chasing up unpaid invoices is too high for you, you can use factoring companies. These professionals offer to buy invoices for you for a lower price than the quoted amount. They then chase up the payment from the customer in full, without you actually having to worry about it at all.
Do Ask Your Solicitor For A Letter Before Action
If you’re planning on writing a formal letter to your client warning of legal action, don’t try to write it yourself. Instead, get your solicitor to draft it so that it is compliant with the law. If you go to court, you may rely on such letters to assist your side of the case.