Keeping the Peace: Tips for Managing Late-Paying Clients

Keeping the Peace: Tips for Managing Late-Paying Clients

When your client fails to pay for your services in a timely manner, it could harm your budget. This issue also puts you in a difficult predicament. You need the money, but you don’t want to jeopardize the relationship with the client. Here’s how to proceed. 

Avoid Harassing Your Client 

One friendly reminder here and there may be effective. If you send emails or make phone calls too often, though, you’ll bother the client. And it could lead to them stalling even more.

Keep in mind that they may be going through financial hardships now but may pay you when they can. Therefore, it might not be them avoiding you or forgetting about you, which means reminders won’t help.  

Remain Calm

The relationship you have with a client should be professional, so avoid yelling at them over the phone or texting in all caps. There’s also no need for threatening messages at first or speaking to them with an attitude. These behaviors could have the opposite effect. 

Instead, speak calmly and in a normal tone. Inform the client that they made an agreement with you and ask when you can expect payment. By keeping your cool, the client will be more willing to work with you, and you can have a civilized conversation. If you yell or threaten, they will likely tell others, which could harm your local reputation.  

Try to Come to an Agreement 

Talk to the client. Let them know that you need the money and have already completed the job or reached the agreed-upon milestone. Ask when you can expect it since they may require extra time. 

If you can’t come to some agreement this way, inform the client that you’ll have to postpone completing any more work until the current balance is paid. 

Offer Incentives for Paying Early

Once you have your payment, try giving the client an incentive. Consider offering a reasonable discount every time the client pays early. Just be sure any offered discounts are fair so you still earn a decent profit on the project.

You can also encourage prompt payment when you switch to a more robust invoicing system that enables clients to pay early by adding an easy-pay button to your automatically generated invoices. By implementing new invoicing software, you can give your clients the ability to pay by credit card or bank transfer with just a few clicks. You can also set up recurring payments so that they never have to worry about missing a due date. 

Suggest Working on a Retainer Model or Getting a Down Payment

Henceforth, change the payment agreement with this client. Let them know that you feel it’s in both your best interest and theirs to work on a retainer model or ask them for a down payment before accepting any high-priced projects. 

Keep Your Clients Happy and Your Pockets Full

Delinquent customers are a true thorn for small business owners. However, rather than getting ugly, there are steps you can take to facilitate payment without ruining a relationship. Stay calm, offer incentives, reach and agreement and use software to simplify accounting. You’ll be more likely to get paid on time and build a long-lasting business relationship, which is the ultimate goal.

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