How To Deal With Late/Non-Paying Clients

How To Deal With Late/Non-Paying Clients

Pre-PS: This post contains affiliate links, we’ll receive a commission if you make a purchase via one of our links at no additional cost to you.

Imagine with us -- it’s the end of the month. 

Invoices have been sent to all of your clients and now... you’re playing the waiting game

Just to make things interesting, you’re taking bets on which client will be the last to pay their bill, and spoiler alert–– guessing the answer correctly doesn’t exactly make you feel like a winner.

Chasing down payments for hard work that’s already been delivered is not how you envisioned owning a business. So what’s a Social Media CEO to do?

Keep reading for some ideas on how to deal with late / non-paying clients once & for all…

Putting smart systems in place can help you avoid scenarios like the one mentioned above from the very beginning. 

While there’s no guarantee you’ll never have to track down another late payment again, these systems will:

  1. Help protect you from potentially shady / lazy clients

  2. Ensure that you have the proper documentation in case you need to seek legal action

  3. Give you a little peace of mind so you can stop refreshing your bank account when it comes time to collect

Whether your social media management business is brand new, or you’ve learned the hard way that clients don’t always pay on time, a contract is the first step to protecting your work. Not only does it outline the scope of work, such as deliverables and deadlines, it also includes payment terms based on the work completed. 

Your contract also needs to include what steps you’ll take if the client doesn’t pay on time or at all for that matter. This could be a mild penalty (such as a late fee) or as serious as taking legal action against them. 

Since we didn’t go to law school, and don’t want to leave something as serious as payment terms to chance, we highly recommend getting all of your legal assets from The Boutique Lawyer!

Making the decision to collect payment upfront can be a touchy subject for some clients, especially if they didn’t come from a trusted referral. With that being said, collecting the payment up front is one of the best ways to ensure you get paid on time! 

We’re also huge fans of monthly subscriptions. You can set these up in most invoicing platforms, and once the client approves, you can basically “set it and forget it”, unless the terms of your contract change. 

If you’re struggling to get your client on board with:

a) setting up a subscription or 

b) paying the full amount before the work begins

... try negotiating a 50% payment up front versus the entire amount.

Keep in mind that the potential client may be wondering the same thing about you as you are them (AKA if you’ll be the one to drop the ball). Again, this can happen with clients that didn’t come from a referral or clients that may have been burned by another freelancer in the past. As long as everything is clearly lined out in the contract, protecting both parties, setting up the payment terms should go smoothly.

If you work on an hourly basis versus a monthly package retainer, you can either set a number of hours needed to complete the work in the payment terms OR you can estimate and collect at least 50% of what you expect to work upfront.

P.S. Always get a backup point of contact if possible. This would be someone that your client approves of to have access to invoices and allows them to pay you on behalf of the business in case the owner (or main point of contact) is unavailable.

Now, if after you’ve put all these systems in place you start to experience difficulty with:

  1. declined payments

  2. late payments, or

  3. no payments at all

… there are steps you’ll have to take to collect your coins.

Assuming that you’ve provided all the payment term details in your contract, one of the first steps you can take is to send a reminder email/2nd notice of invoice. This may or may not include a late payment fee (completely up to you).

If the client hasn’t paid within your designated time frame, the next step might be to cease any type of work you’re currently completing on behalf of the client. 

Pro Tip: Make sure to include that all payments must be made in full before work restarts if this situation comes up.

If you’ve taken all the above steps, and there’s still an outstanding invoice to be paid, it may be time to seek legal action. 

Again, this is where you want your contract to be “zipped up” and crystal clear. Save yourself the headache of piecing together a half-ass, will-never-hold-up-in-court contract, and snag one from The Boutique Lawyer >>> RIGHT HERE.