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Seven Methods for Dealing With Clients That Don't Pay

Nothing in the world of business can be more frustrating than doing a great job for a client and then being forced to chase them to pay the bill. This brief guide will highlight seven ways to deal with non-paying clients in order to resolve the situation quickly and amicably.

Be Patient

Just because you performed a service for or provided a client with goods does not mean that you will receive payment the next day. Many businesses pay for goods and services on a set schedule. These schedules may be weekly, bimonthly or monthly. Make sure that your billing department or person recognizes the need for a reasonable amount of time for companies or people to pay for goods or services provided.

Have a Plan

Billing should not be done by the seat of your pants. Every business should have a plan for billing and invoicing receivables. This plan may include initial billing dates or times, secondary follow-ups and further follow-ups. Having a system in place allows your automation to perform the vast majority of the work, giving you the time to focus on other areas of business growth.

Automate

There is no reason to waste time by having someone manually send invoices or request payments. There is plenty of available software now that can handle billing and associated tasks automatically. This software can provide you with simple, easy to digest snapshots of your receivables and who has paid and who has not. These snapshots allow you to manually follow-up with anyone that is not paying or is posing difficulties.

Offer Something for Clients That Pay Rapidly

Another way to deal with clients that don't pay is to motivate them to not only pay but to pay rapidly. This can be accomplished in a variety of ways. One simple method might be offering a service or product discount to those that pay within 15 days of delivery or completion. In that case, you may offer them 5, 10 or even 15 percent off the retail price. Whatever the case may be, make sure to offer them something they will view as being worthwhile. This could be discounts, free goods or services or other promotions.

Cut Them Off

if your business is working on a large project or order for a client that is not paying, you can also simply stop fulfilling the order or providing the service. This route is not ideal, however, as it can create a degree of animosity between your business and the client. You need to ask yourself how much this client is worth. Have they paid in full in the past? What has been their normal time to submit full payments? Are they a quality source of business that can assist your business as it grows? If the answer to any of these questions is a negative rather than a positive, it may be time to consider ending the relationship with the client in order to focus on other clients or obtaining new clients.

Provide Payment Flexibility

Providing some degree on when and how you get paid may also assist some clients in holding up their end. While it is reasonable to expect payment right away for a small job, a much larger job or order could be tens of thousands of dollars. These amounts could be difficult for any person or business to fork over at once. If you are able to offer a three month payment plan or schedule, for example, it may make paying easier for clients and they will likely be more willing to stay on track.

Use a Collection Agency
A collection agency may also be useful for clients that have refused to pay for a significant amount of time. Due to the fees involved with using an outside agency, you may want to only consider their use for extreme cases. Finding a collector is simple. If you are in the Sydney area, for example, you can just google "Sydney Debt collections" and it should return applicable results. These companies may be open to negotiation as well, so make sure to inquire about ways you may save money on collections performed.

About the Author:

Eric Reyes is a passionate thought leader having been featured in 50 distinguished online and offline platforms. His passion and knowledge in Finance and Business made him a sought after contributor providing valuable insights to his readers. You can find him reading a book and discussing current events in his spare time.

Olivia Wilson
Olivia Wilson
Olivia Wilson is a digital nomad and founder of Todays Past. She travels the world while freelancing & Guest blogging. She has over 5 years of experience in the field with multiple awards. She enjoys pie, as should all right-thinking people.
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