6 Best Strategies to Avoid Unpaid Invoices

don’t pay

Make a note of when you should expect payment, along with a calendar alert to follow up again if payment doesn’t arrive as promised. When your recalcitrant client is a business with levels of management and control, begin going up the chain. If the person who engaged your services doesn’t respond or isn’t helpful, contact the billing or accounts payable department. If that proves futile, consider contacting the chief financial officer or the president of the company.

  • It’s because you’re not sure about your client about how and when they’re going to pay you.
  • This will be the last reminder that payment is due, and should be designed to get your client’s attention.
  • Take steps to better prepare your company for these events in the future.
  • The stricter processes of the District Court necessitate the need for assistance from a capable attorney.
  • If you don’t hear back, try any other contact information you have on file.
  • But if you’ve made every effort to collect payment from your client and they still refuse to pay, you can try taking them to small claims court to recover your money.

If nothing What Can You Do If A Customer Doesnt Pay An Invoice? doing to receive your payment is working, including hiring a collection agency, your final option is to speak with an experienced attorney. They’ll recommend which legal courses of action you should take against your client, and ensure you’re adhering to any relevant laws or regulations . From a friendly email for invoice payment, to a final demand for payment letter, if you’ve tried everything and your customer won’t pay, you might decide to take more serious action. It’s frustrating, damaging and can even be distressing, especially if you’re forced to take legal action.

How to Contact a Collection Agency to Pay a Bad Debt

Consider relying on a comprehensive invoice template to guide your invoicing process. The clearer your invoice is, and the easier it is to pay, the more likely your customers will be to pay on time. So, for starters, make sure the terms and due date on the invoice are prominent.

business owner

The thing is, there are signs that a customer may not pay on time, and there are things you can do to get ahead of these situations. Check the contract you signed to see whether disputes require binding arbitration, an out-of-court resolution process. In such a case, an arbitrator will consider your dispute and decide how to resolve the case. If your contract has a clause for binding arbitration, this means you cannot take the client to court and you must abide by the arbitrator’s ruling.

When a Client Doesn’t Pay: 5 Steps to Take

When clients pay late or don’t pay, your business and personal finances suffer. You may not be able to meet your business expenses or pay your personal bills. You risk falling behind in monthly credit card and loan payments. You may also have to use business or personal credit to make ends meet while you’re waiting on payments and may be stuck with debt if you’re never paid. Accepting electronic payments or credit cards may give your clients helpful options to pay on time.

legal action

There’s nothing like the frustration of dealing with customers who don’t pay bills on time. For small business owners in particular, you rely on invoices being paid for cash flow. No matter where your agency is in terms of maturity and size, money can be a sensitive topic. You depend on your clients to pay invoices on time, but unfortunately, it doesn’t always happen. Sometimes a client is having financial problems of their own or they simply forget to process a payment. Depending on your client’s reaction or lack thereof, you can send more than one of these letters, escalating the matter’s urgency.

Take legal action for nonpayment of invoices

If the debtor, simply ignoring to pay without stating the reason – you need to send the case to a Debt collector to put some pressure on the Debtor. Default in payment can always be traced back to one of these three reasons, your customer; forget to pay, cannot pay, or, refuse to pay. Once you have acted promptly against your customer, he will hopefully pay you, or at least give you an explanation why the payment is overdue. Refer directly to the overdue invoice and ask about the reason for the delay of payments. Be clear that the consequence of non-payment is the initiation of escalated steps. You should underline that these overdue payments are concerning for your company.

Sometimes the act of pausing work will be enough to get you paid. Hiring an attorney to write a demand letter won’t obligate you to retain the attorney if you do move forward with a lawsuit, unless you agree otherwise. By following the incremental steps below, you can expose the reasons you haven’t been paid, design an appropriate response, and collect the money you are owed. Whether it’s dating or freelancing, it’s easy to expect the worst. For one, you can’t help but think you’re down hundreds of dollars simply because you haven’t received a reply from your client—especially if you’ve been burned in the past. However, you mustn’t conclude your client is trying to ghost you if you aren’t entirely sure.

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