Managing to turn your passion into a business in no small feat. While it may be tempting to relax a bit once you’ve started landing clients, the reality is your job has just begun. After all, we all know that making money is crucial to the success of your business.
Chances are, most clients will pay their invoices on time and without hassle. Inevitably, though, you’ll encounter a client who is very slow to pay or ignores your invoices entirely.
Dealing with non-paying clients is one of the least pleasant aspects of running a business. The good news is, there are ways to increase your likelihood of getting paid without having to resort to legal action.
Be Prompt in Requesting Payment. Most likely, you’re very diligent about sending out invoices for the work you’ve done. You should be just as diligent about following up on those invoices. There are many reasons clients fail to pay, and some are as innocent as simply forgetting or misplacing an invoice. A timely reminder may be all it takes to trigger payment.
Be Persistent. If your client doesn’t pay after the first reminder, send a second one. The clearer you are that you’re serious about payment, the harder it will be for clients to continue to blow you off. Consistent reminders may move your invoice to the top of their payment pile.
Avoid Threats. Unpaid invoices are understandably frustrating. However, being rude or sending threats won’t increase your likelihood of being paid. It may have the opposite effect, and cost you future business to boot. Instead, stick to clear statements of what is owed, when it is owed, and any penalties for non-payment.
Make it Easy to Pay. The easier it is for clients to pay your invoices, the more likely they are to do it. Today, there are countless electronic payment options and apps that speed up payment. If you insist on waiting for a check to come in the mail, you may end up waiting a long time. By offering a variety of payment methods, you eliminate many of the excuses for late payments.
Stop Working. If clients refuse to pay, don’t continue to work for them as if everything is normal. When it becomes clear that payment isn’t forthcoming, stop the work you’re doing and refuse to take on additional projects. Agreeing to do more work for a non-paying client will only lead to additional unpaid invoices down the road.
Legal Action. Ideally, the right approach to pursuing unpaid invoices will allow you to avoid taking extreme measures. Sometimes, though, all the reasonableness in the world won’t matter. In these cases, your only choice may be to consider pursuing official collections or turning to small claims court.
Remember, a client’s lack of funds isn’t an excuse for non-payment. At the end of the day, it’s your livelihood that’s on the line when invoices go unpaid, and you need to be diligent in making sure you collect what you’re owed.
Legal Guidance to Protect Your Growing Business
At The Gouchev Law Firm in New York, we work with businesses of all sizes, including start-ups and franchise businesses. Call us at (212) 537-9209 or schedule a free strategy session today to see what The Gouchev Law Firm can do for your business.