If you’re a freelancer or business owner of any kind, it’s practically inevitable that one of your clients will one day miss the payment deadline on your invoice. This can be a frustrating experience, especially when you’ve put in the hard work to deliver on your own obligations to the client. Here’s a step-by-step guide on what to do if you’re ever in such a situation.
1. Follow Up With Your Client by…
a) Sending your client an email
If you haven’t received any payment by the deadline, the first thing to do is to ask your client about it. No, you should not be serving legal papers on your client right away. The client may have simply forgotten to pay you, and suing them one day after the deadline can cause a lot of embarrassment on both sides.
This seems obvious, but it’s still worth noting. Remember that taking legal action often burns bridges. It should therefore only be your weapon of last resort.
Send your client a friendly (or at the very least, polite) email to remind them to make payment as soon as they can. Attach your invoice to the email, to make it more convenient for them to refer to it.
b) Giving your client a phone call
Hopefully, your reminder email will have jolted your client’s memory and sparked a conversation about when you will be paid.
However, if you’ve sent a few follow-up emails and received no response, try phoning your client. A phone call can be much better than an email at ensuring that your message actually reaches a human being.
Again, be polite during the call. Remind your client that you’ve issued an invoice that hasn’t been paid yet, and ask when you can expect to be paid.
At the end of the call, follow up with an email to your client recapping the essentials of the phone discussion so you have a written record of it.
If the client agreed to pay you by the end of the week, for example, be sure to mention this in the email. This way, they’ll find it much harder to deny ever making such a promise.
c) Going down to your client’s office
Say the first time you called, the client realized what this was all about. They quickly then made some excuse that they couldn’t talk right now because they had a meeting, and asked you to call back later. So you dutifully do so (multiple times), but your client is never available to speak to you for some reason or the other. In this case, consider heading down to your client’s office to discuss the matter, in person, once and for all.
One limitation of this approach is that you can only do so if travelling to their office won’t take up too much of your time. There is also no guarantee that who you’re looking for will be in when you’re there.
2. Consider Legal Options
a) Sending your client a letter of demand
At this point, if your client is still showing no signs of paying, you may have to resort to the law to get your money.
To show you’re serious, you can first send your client an official letter of demand for your money. In the letter, mention all the details of the matter, such as:
- The name of the project you worked on
- How much you’re owed
- When payment was supposed to be made
You can end the letter by making a demand for payment, where if they fail to pay up by a certain deadline, you reserve the right to commence legal action against them.
b) Suing your client in court
If your client ignores your letter of demand, you can take them to court.
Depending on the country you’re living in, you may be able to sue your client in a small claims court. Such courts are designed to handle claims below a certain amount in a quick and cost-affordable manner. You may or may not be able to have a lawyer represent you in such proceedings.
If there isn’t a small claims court that you can go to, or if the amount you’re claiming is too large to be handled in the small claims court, you may sue your client in a regular court instead. You may want to engage a lawyer to assist you with the process.
However, consider the cost-effectiveness of this approach before going ahead. Lawyer and court fees may eat up a large portion of the sum that you’re attempting to recover, or even exceed that amount.
Whatever you do, it’s important to remain professional when asking your client about the missed payment. You don’t want to immediately cut ties when this isn’t called for. As mentioned above, your client could have simply forgotten about your invoice and need a gentle nudge, or perhaps they had sent a check which got lost in the mail through no fault of theirs.
On the other hand, if the client is really proving to be a bad egg, you may need to think long and hard about whether the matter is worth pursuing.
This may be a bitter pill to swallow, but depending on your situation, writing off the payment and blacklisting the client could be the more economically viable option for your business.
About the Author
Tan Siew Ann is the founder of lancerX, a community of freelancers passionate about their craft and leveraging on it to grow meaningful and sustainable businesses. Siew Ann is a non-practicing lawyer and uses her digital marketing smarts to help freelancers gain greater awareness of their legal rights and access to the law. A strong believer in the growth of the gig economy, Siew Ann is also an advocate for self-discovery and pursuing what you love.