5 Ways to Get a Delinquent Client to Pay

Your company provides great products and/or services, and you expect to be paid for them. This is the reason you started a business in the first place. And while retail stores get paid on the spot prior to the customer taking an item home, service providers or B2B product companies may be required to send invoices at certain milestones during a project, after a project has been completed or when a product has been delivered.

Some small businesses struggle with sending invoices in a timely manner. It’s a task that can fall through the cracks until the business owner realizes that they are running low on cash. I recommend automating and scheduling invoicing as much as possible.

But let’s assume that you sent your client an invoice after a project was completed and they haven’t paid you. First, you need to understand your client’s internal policy for paying invoices. Is it net 30, 45, 60 or 90 days? Often, the bigger the company is, the slower they are to pay.

If you’re getting nervous about not being paid at 30 days when your client’s policy is 60 days, you’ll just have to wait. Understanding your client’s process and timeline in advance can give you some peace of mind that you will get paid eventually.

If your business is having a cash flow crisis, you might want to check out this previous post. Sometimes there can be issues with invoices getting paid. If you have a client who you are concerned about, here are some tactics to try:

1.  Don’t assume.

It’s so tempting to assume that your email invoice or snail mail bill was delivered as you intended. But think about it, have you ever not received something important? Or maybe you missed an email message because another important email came in at the same time?

When in doubt, send it again with a note saying that you just wanted to make sure that they received it. Offer to answer any questions they might have.

2.  Confirm your contact.

This is a good time to go old school and just pick up the phone to confirm that your invoice was received. You may find out that your contact is on vacation or maternity leave and didn’t set up an out-of-office response for their email. Or you could discover that the contact you have been working with for years has left the company. It happens!

Try to work directly with the person who can issue the check whenever possible. And while you have them on the phone, try to get a commitment on the timeline for the payment. Be understanding but firm when you speak with them.

3.  Suggest splitting the payments.

If there has been an unexpected delay or if something has been partially delivered, you can suggest splitting up the payment so that half is paid immediately and the balance is paid upon final delivery and approval. A client who wants to maintain a good relationship with you as a service provider or vendor might be agreeable to this option.

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4.  Offer a discount.

Occasionally, you may have a difference of opinion with your client or customer. If there is a dispute, you might want to try offering a discount if they pay immediately or within “x” days. Sometimes it’s better to lose a little than risk losing a lot. Cost-sensitive clients might go for this to save some money and keep a good relationship.

5.  Seek legal solutions.

This should be your option of last resort. Try the other options first, as this tactic can burn a bridge (although, if you have gotten to this point, you may not care about that). The mere mention of taking legal action can be enough to shake loose some money. If the amount isn’t too big, small claims court also can be an option.

Sometimes a letter from an attorney will get attention because your client will think of the expense involved in litigation and (hopefully) will want to avoid this. Please note: This tactic will work better for companies that do not have an attorney on staff. If they have an attorney on staff, they could be willing to have that attorney work on your complaint.

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Communication is key.  Hopefully, you will find that the issue was simply caused by a lack of communication or an oversight. Communicating effectively and frequently with your clients can save a lot of stress and aggravation on both sides.

Ajeet Khurana
Ajeet Khurana
Ajeet Khurana wears many hats: author, angel investor, mentor, TEDx speaker, steering committee of the NASSCOM Start-Up Warehouse, Director of Founder Institute, Venture Partner with the seed initiative of a top Venture Capital firm, and former CEO of IIT Bombay’s business incubator, among others. Before all this, he was entrepreneurial twice in the field of education and web publishing. As a lecturer at the University of Texas at Austin, he taught e-commerce back in 1993, when the term "e-commerce" had not yet been coined. An undergrad in computer engineering from the University of Mumbai, and an MBA from the University of Texas, Ajeet is presently an active name in the startup ecosystem. From starting two ventures as a solopreneur, to helping a large number of startups with their go-to-market, he has never shied from getting his hands dirty. At the same time he has helped dozens of startups raise investment. He truly believes that small business owners are driving change in the world, and need to be facilitated as much as possible. Innumerable small businesses have gained from his attitude, vast professional networks, financial acumen and digital mindset.

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