11 tips on what to do when a client doesn’t pay

May 30, 2022

Learn what to do when a client doesn't pay

It’s been over a month, the invoice is due but your client is ghosting you and you have no idea what to do when a client doesn’t pay – a tale as old as trade. Truth is, it can happen to anyone, regardless if you’re inexperienced or seasoned. 

Some business owners learn how to collect money from clients the hard way. However, you get the privilege to learn from their mistakes and be prepared when a situation like this happens, because trust us, it will at some point. Especially in an economic crisis like this, when everyone is facing a shortage of cash.

Several entrepreneurs who learned their lessons the hard way were willing to share their insights and tips on dealing with clients who refuse to pay. There were some radical answers involving baseball bats, but we left them out and you should too.

Most effective 11 ways of dealing with clients who refuse to pay

As we all know, money makes the world go round. So when a client won’t pay, you’re risking being late on a mortgage payment or disappointing your child because you need to cancel the trip to Disneyland. As late payments can also result in debt management problems, it is best to consult professionals early on – such as the insolvency practitioners. However, there are quite a few important things that depend on your clients paying their invoices on time.

Here are the best ways of dealing with clients who refuse to pay, so your world can keep spinning round and round.

Send an email to notify them

It is the most socially acceptable way of requesting a fee. Make sure the email is not contentious and uses appropriate words. It’s easy to send a professional email for a financial windfall, but please remember that you’ll be focusing on building a connection with the customer based on generosity. 

Start by making certain that there is no mention of prices within the subject line. There is no easier means of ensuring that an email ends up going unread if, indeed, the valuation is included with the introductory paragraph, and the email would have had an assured greater likelihood of being considered alternatively. 

Simply ask for remuneration and inform them that there is an estimated bill included in the mail and let them know that you have also elaborated on the method of payment for their convenience.

Elena Jones, PR Director at FinanceJar

Have a contract

Always have a contract and set expectations from the start. Before working with new clients, make your payment terms clear, such as 30 days net, due upon receipt, and so on.

You might also add a policy on late fees and penalties, which can be a disincentive to miss payments. You should always solidify the agreed rates and terms with a legally binding contract. It is a binding agreement that will give you more security and obligate them to pay you.

John Cheng. I’m the Co-Founder and CEO of Baotris

Don’t let a customer’s debt to build up too much

The most important thing is not to let a customer’s debt build up too much, keep them paying regularly, and put them on stop if they are outside your business terms. Nobody likes a BIG bill and if a customer hasn’t paid for 2 or 3 months, sometimes longer, the amount owing can be very unpalatable for a client to pay or just make them question your service altogether. 

Putting clients on retainers works as well for us as using direct debit and you can even do it through an online payment service, but the best way to get paid is to take the matter to the top, straight to the business owner, often business owners aren’t aware that their accounting department isn’t keeping on top of payments and once you get the MD involved things tend to get sorted out much more quickly. 

Don’t take any excuses either, many accounts departments will say ‘we haven’t seen the invoice’ – it’s always a good idea prior to the end of the month to call and make sure they have the invoices in a polite conversation. I’ve always said you catch more flies with honey than you do with vinegar and asking nicely goes a long way further than beginning with threats of a court action which always becomes protracted and ruins future business goodwill.

Simon Young, Managing Director at Institution

Nurture your client relationships

We try to maintain our client relationships so they feel a bit more valued. This can be done by simply checking up on them every now and then, helping them with a problem they may be experiencing, or even by featuring them in our content in some way.

In the past, we’ve worked with not so reputable brands so we decided to deliver the work only after we were paid which worked for us. For those clients who are genuinely struggling, we have offered payment plans to help them pay off their debts.

Paul Gibbens, Marketing Executive at Housebuyers4u

Plan ahead, Keep in touch, Be firm

Plan ahead – When dealing with a client who refuses to pay, the situation is evolving rapidly so it’s important that you continue to have a good idea of where you stand amid all of the uncertainty. Keep updating your cash flow forecast as new information becomes available, and pay particularly close attention to your list of debtors. 

Keep in touch – Stay in contact with your debtors to find out how they’re getting on and to anticipate any potential problems. Regular communication can also help bolster your relationship with your clients, which is particularly important in a time of financial stress. Our experience suggests that the old adage of a stitch in time saves nine is particularly relevant when it comes to debtors, as a tricky conversation early on can prevent a potential issue from snowballing into something much worse.

Be firm – Make sure that you’re very clear in your conversations with debtors. If you’ve delivered on your side of the contract, the default position remains that you should be paid – and paid on time. Cash is king in the current economic climate, so try to resist the temptation of writing off (or waiting for) what you’re owed. It’s also worth remembering that delays to payments by your debtors could risk a knock-on effect further along the supply chain, as you may then struggle to pay your own creditors on time.

Chris Clay, Managing Partner at Escalate

Before you take dramatic measures, communicate with your client

To rule out simple errors, communicate with your client. If you have a client that doesn’t pay, ensure the payment was not missed due to a misunderstanding or other mishap. It goes without saying that you should avoid burning any bridges unless absolutely necessary.

If a client fails to make a payment on time, contact them and respectfully remind them. They could have miscalculated the date or just neglected to transfer your funds. Depending on the contract, you may be able to request a late fee in following situations. In certain circumstances, the missing money is the result of a technical malfunction or another issue that is not the client’s

Allowing a little leeway here could be beneficial. Giving the client another chance to fix the problem demonstrates good faith and may result in a glowing review, referral, or additional business.

Kavin Patel, Founder and CEO of Convrrt

Attempt a different method of communication

When a client refuses to pay, having a different method of contact for them can be beneficial. Pick up the phone and try to engage in a vocal chat with them instead if your follow-up emails haven’t been acknowledged. You may be able to determine the cause of any missed payments and rectify the issue more quickly this way.

Alternatively, try contacting someone else within the organization, preferably a member of the same team as your client, to see if they can assist.

Ankit Kaul and I am the Founder and CTO of Excel Trick

Charge interest on invoices

This is legally enforceable, and you have a right to do this. It is known as ‘statutory interest’ and is calculated at 8% (after the invoice is due, accumulated daily from then on) plus the Bank of England base rate. So each year from the due date, an invoice accumulates 8% interest). Should a debt reach debt collection or Small Claims Court, always ensure this interest is properly calculated, and add it on.

Similarly, offer early payment discounts. Perhaps 5% if an invoice is paid within a week (rather than the agreed 30 days). This gives you immediate cash in the bank and rewards good customers, rather than punishing poor ones.

Paul M. Jones, Credit Controller PJS Credit Management

Get in touch with the person in charge

Be nice. It might be tempting to scream down the phone “where’s my money?” but don’t. If they do intend to pay at some time, being polite will help speed things up.

Find the right person. One of the most important things to do when a client doesn’t pay is to check who actually makes the decision as to when payments go through. Is it the person who issued the order, or the finance person? If you’re not sure, ask.

Help them pay you. If a client won’t pay, maybe give them a gentle reminder, a reason to pay you. Detail what you have provided, check there are no issues with the invoice, and make sure they are satisfied with what has been delivered.

Check your contract. Make sure your payment terms are clear, simple, and protect you. Set out exactly when you expect payment. Detail late payment fees.

Moreover, you can consider:

    • If emails are ignored then call.
    • Offer payment by installments – 50% now, 50% next month.
    • Letter before action – low cost (around £5 from solicitors or debt collection companies).
    • Statutory demand – a bankruptcy threat.
    • Money Claim Online – start litigation online (but read the guidance first).
    • Invoice factoring – sell on the invoice to a third party.

Susan Francombe, Founder of The Business of Building

As a last resort, seek legal advice

Lawyers can be costly. You and your customer will almost certainly wish to avoid going to court over your project for this reason alone. However, there may be times when none of the other options are effective in resolving the matter. As a result, legal action should be considered.

Allowing clients to get away without paying for your services sets a precedent, and you don’t want to come across as someone who is easily exploited. Your first step should be to consult your contract’s Dispute Resolution Clause. 

First, take the steps you’ve outlined. This may include a procedure known as ‘arbitration,’ in which you enlist the help of third parties to analyse the problem. If it doesn’t work, you can find yourself in small claims court. This should only be used as a last resort because it will almost certainly be costly, time-consuming, and depleting. Fortunately, many disagreements never  reach this point.

Rameez Usmani, Director of E-Commerce and Retail at Selkirk

Disable or withhold the final product

You clearly can’t cease working on the project if it’s already finished. However, you might be able to keep it out of the hands of your client until you’ve been paid. It’s a wise decision to keep your access to customer projects until your fees are paid in full. 

If the client then tries to avoid paying you for your services, you might deny them access to the

project. While it may appear trivial, it is entirely reasonable – your contract states that you would offer the finished product in exchange for a certain amount of money. The client should not get their website or app if you don’t get paid.

Matt Weidle, Business Development Manager of Buyer’s Guide


When it comes to dealing with clients who refuse to pay, it is important to remember that every situation is unique on its own and has to be carefully reviewed before any action is taken. For what it’s worth, long-time, loyal clients cannot be approached the same way as one-time clients. 

You don’t want to break a good work bond because of one late payment. When a client won’t pay always try to work things out with a civil conversation. However, if things get out of control remember that in these types of situations, the law is on your side.

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