What do you do when your client just refuses to pay? Maybe you have already been there, maybe you haven’t, but if your business depends heavily on customers being satisfied and payments being made on time (sounds like most businesses to me- accounts payable outsourcing, HR firms, retail), you are bound to face this at some point. So now, what do you do when that happens? Deal with it politely and respectfully; here’s how accounts payable outsourcing firms recommend you proceed.
- Send Friendly Reminders– Monthly bills and phone calls politely reminding of overdue payments are fine and needed even. However you should take a look at your state’s collection laws to ensure you do not get into trouble with the law for harassment.
- Understand Things from the Client’s Point of View– Most often, clients don’t pay because they aren’t happy with the services provided. Place yourself in their shoes, understand where they come from and acknowledge their point of view. If needed, offer discounts on future services. Understand that it is easier to maintain relationships than build new ones; if there is a way to retain the client, do it. But if you find that things don’t work out in spite of your best efforts, it may be best to end the relationship.
- Get Legal Help– If your client still refuses to pay up and is giving you trouble, it might be time for you to approach the small claims court or civil court. Do thorough research and consider your options before doing this. Sometimes clients will agree to pay when things reach the court to avoid legal proceedings. Make sure your client is aware of your intentions beforehand. Do not let your legal proceedings take them by surprise.
Collecting payments from a client who just refuses to pay is not pleasant, which is why it makes sense to prevent it already together. Unfortunately such things need not always be in your hands. If you find that accounts payable management is becoming too much for you and your business, it might be a good idea to invest in an accounts payable outsourcing firm.