It’s frustrating chasing down clients who pay late not knowing if they will or won’t pay, but late payments and nonpayment are the realities of owning a business or freelancing – and how you react to these situations can have a huge impact on your business. That’s why AngelytiX offers the following tips to help you pursue late payments without potentially damaging your relationship with the client.
Send a Few Reminders
As ZenBusiness points out, good communication is the key to success. After all, just like you, your clients are busy with their businesses and personal lives. Therefore, a late payment isn’t always a sign a client is avoiding you or doesn’t want to pay. Sometimes the reason for nonpayment or late payment is legitimate, such as the client may not have the funds at the moment but plans to pay once their capital is replenished. On the other hand, maybe they didn’t receive your first invoice. Consequently, the best thing you can do at first is to send a few reminders.
Use Legal Action as a Last Resort on Clients Who Pay Late
While it may seem like threatening legal action is an effective way to seek payment, this isn’t always the case. Plus, this can sever the relationship with your client.
Once a considerable time has passed, you can inform the client you plan to take legal action. Make sure you phrase it professionally and give them a timeframe when it’s likely to occur, such as in a week. By giving the client a warning, they may worry about the legal consequences and take action.
Before you resolve the problem legally, consider whether it’s worth the time and expense. Legal action may damage both the client’s reputation and yours. Plus, the process is time-consuming and costly. It may be in your best interest to overlook the debt and find new opportunities.
Use Constructive Communication Tactics with Clients Who Pay Late
Communicate effectively, so the client understands exactly what you want and expect from them. This is true for both current and new clients. When clients understand you take your business seriously, they’re less likely to pay late.
One way to communicate better when sending files to clients is to compress large PDF files so that the files transmit to the client more easily. Bear in mind that you can ensure the file maintains its structure, fonts, and images by using a reputable converting tool.
Take Preventative Measures
In the future, take steps to prevent late and nonpayment. Have a written contract that clearly states what’s expected from the client in terms of payment. The contract must include the date, the parties involved, and any specific payment terms. It may also include any termination conditions. Additionally, consider implementing late fees to encourage clients to pay on time to avoid paying more than necessary.
To increase the likelihood that you receive payment, use programs to make invoicing and running your business simpler. For example, automatic credit card billing via authorize.net is a great way to make this process easier. Also, strive to prevent late payments in the first place by using contracts and strategic communication.
AngelytiX acts as a combination of business coaches and consultants – guiding/teaching wherever possible but able to step in and do as necessary. We use this mixture to be more hands-on than other business coaches while being more budget conscious than other business consultants. Schedule a free consultation with us here.
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