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10 Tips for Dealing with Clients Who Won’t Pay

Participant ✭ ☆ ☆
# 1
Participant ✭ ☆ ☆

 

Happy Monday Y'all.  

 

We all had at least one, a client who refuses or can’t pay an outstanding invoice.  Here's 10 tips to handle Clients who won't pay up.  Smiley Happy

 

1. Call them with a friendly reminder.  Many times that's all it takes.  Make sure to leave a voicemail.  In my opinion it's also okay to call the CEO's personal cell phone if it comes to that.

 

2. Offer discounts for paying early.  This really helps your cash flow. 

 

3. Empathy.  Let the client know that you understand the problems of being a small business.  

 

4. Be flexible.  Remain calm and offer to settle for a fair amount.  Offer a payment plan or referral program. 

 

5. Consult with a lawyer.  Have your lawyer draft a demand letter.  This many scare the client into paying.  I have a few good templates.  

 

6. Find out if it's worth going to a collection agency.  I've used them in the past and they can be anywhere from 20% to 45%.  

 

7. Have ready made templates to send out at 30, 45, 60 days.  Each template should be more demanding.  

 

8. Email everyday.  This preps for the legal process... should there be any. 

 

9. Investigate if there are assets.  No point in continuing if there is nothing to collect.

 

10. Cut your losses and move on.  Sometime it happens.  Live and learn. 

 

Do y'all have any more suggestions?  I'll have something cool for y'all soon.  Collection emails/templates.  I have to make them for my agency so I thought I would share when they are all done.  

 

 

1 Expert replyverified_user

Re: 10 Tips for Dealing with Clients Who Won’t Pay

Top Contributor
# 2
Top Contributor

These are great tips, @Tony_Guo.

 

Since I am Italian, I send Vinnie with some pizza and a friendly note that says "after we eat the pie, we will write checks." Robot LOL

 

Okay, that was uncalled for... Robot Embarassed.

 

Along with most of your suggestions, we keep up closely with clients and only extend the level of credit that we feel they can handle. Never let a micro-small business that is bad with money management get in too deep. Some people see $500 as a huge amount and will burn a bridge over it, while another will spend that at dinner tonight. Keep things relative to the person/business.

 

Accounting sends invoices on the first, due on the 10th and late after the 15th. If not paid, new communications goes out on the 20th, then the 25th, and again on the 30th. The first one is funny and friendly (please feed me, I'm hungry). The next one points out the need to pay us promptly so we can give their account the utmost care and explains again that the invoice was due on the 10th. The next one stresses the serious past due and that the account will be throttled back and performance will drop. We also make phone calls, physically visit them, text and call the owner after it gets to the serious point. We never get ugly and we always get paid. We just make sure to put the problem on them and rely that updates to websites, ad creation & placement, audits, meetings, etc. all are on hold while account is unpaid.

 

If account still goes unpaid, we interact every few days and dig into issues and offer to find a solution to help them. If nothing works and it still goes unpaid, we send them a pizza with a friendly note...

 

Kind Regards,

 

James 

 

 

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Re: 10 Tips for Dealing with Clients Who Won’t Pay

Explorer ✭ ✭ ✭
# 3
Explorer ✭ ✭ ✭

Hi Tony_Guo

 

i have had a couple of clients who havent paid me after providing great service. I usually email and call them, if they dont respond positively then i cut them lose as clients ... too much negative energy

 

regards,

 

Zaby 

My Site

Re: 10 Tips for Dealing with Clients Who Won’t Pay

Participant ✭ ☆ ☆
# 4
Participant ✭ ☆ ☆
Extending levels of credit is a great idea! I hadn't thought about that. Sometimes we have excellent clients who have trouble paying during slow months. We don't want to lose them, but it makes talking about marketing for next month incredibly difficult.

Re: 10 Tips for Dealing with Clients Who Won’t Pay

Participant ✭ ☆ ☆
# 5
Participant ✭ ☆ ☆
That may be for the best. I'm a lawyer... so I like the challenge of collecting. Smiley Happy