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So you’ve completed that fantastic project for a client, they sign everything off, and you submit your invoice. And then…nothing. It’s a story that’s all too common for freelancers and contractors. A recent survey by MarketInvoice found that 66% of invoices in the UK in 2017 were paid late.

But what do you do if your customer isn’t coughing up? And how do you approach the thorny subject of payment without souring the relationship? Well, we’ve put together a bunch of tips to help you navigate the issue. Have a read through, get those late invoices dealt with, and get back to running your business.

Double-check your facts
Before you start to nudge your client about late payment, it’s worth going over the details at your end. Did either party stipulate set payment terms (it’s usually 30-days, but sometimes the client might have other terms)? Are you sure you sent your invoice? Did you include a purchase order number if one was needed?

Making sure you’ve covered all the requirements at your end will avoid any potentially embarrassing conversations with the client when you point the finger over late payment.

Make sure you’re talking to the right person
It’s often the case that your day-to-day client contact isn’t necessarily the person who will deal with paying your invoice. As such, it’s worth getting the contact details of the finance team if you need to chase payment.

Getting the right person’s details needn’t be an awkward process. A quick email to your client contact will often result in you getting the info you need. And most project managers will be happy to let you deal with payment queries directly, rather than them acting as mediator.

Keep things friendly
Although not getting paid on time is annoying, remember that there could be a completely valid reason why your invoice hasn’t been sorted. And, as with any client communication, remaining courteous and professional is always the way to go.

Say, for example, a client is two or three days late on paying up. The best thing to do is drop a quick email to the relevant person attaching the invoice, and politely pointing out payment is now due — something along the lines of “Hi, [name]. I hope you are well. I’m just checking if you’ve had a chance to pay the attached invoice yet? It’s now overdue and requires payment. Thanks.”

Get them on the phone
It’s an underused communication method these days, but picking up the phone and speaking to a real human can be surprisingly effective.

A quick call to the finance team will more than likely get your invoice placed on top of the ‘to pay’ file, and it’ll show that you are serious about your business too. It’s a win-win!

Add interest if things aren’t moving
Okay, so you’ve casually emailed the client. You’ve tried calling to find out when you’re getting paid. But still, the cash hasn’t hit your account. It’s maybe time to dial things up.

The next logical step is to email the client again, stating that if your invoice isn’t cleared within a given period you’ll be forced to charge interest on the amount outstanding — this currently stands at 8% plus the Bank of England base rate.

Give them a reasonable amount of time to pay. If they still haven’t come up with the goods, reissue your invoice with the stated interest added. Remember to be friendly but firm in your tone.

Put a hold on work
If you’ve tried all of the above steps and nothing is working, it’s time to take things up a notch. It might go against all your entrepreneurial instincts, but to make your message clear refuse to carry out any new work with the client. This will show them that you’re serious about getting your unpaid invoices sorted.

If you want to play hardball, then consider holding back the delivery of any outstanding work until your invoices are cleared. Be warned though — taking a step like this will require treading carefully to avoid souring your business relationship.

Bring in a debt collector
It might sound dramatic, but if a client isn’t budging, then you may have no choice but to bring in a debt collection agency.

But debt collection doesn’t just mean burly men in leather jackets banging on your client’s door. There are a number of agencies that will provide support in legal documentation, communicating with the debtor, and finding a professional resolution to the matter — all without sending in the heavies.

Turn to a solicitor
As a last resort, you may need to enlist the help of a solicitor to help get the money you are owed. The costs incurred will depend on the size of the debt, and you can charge the client a fixed sum for the cost of recovering the late payment. But there are no two ways about it – things could get expensive.

To save yourself some money (and avoid potential stress), you could consider the UK Government’s Money Claim Online service. For this route, the debt needs to be under £100,000, and you’ll need a Government Gateway account.

Avoid bad payers in the future
As the old saying goes, prevention is better than cure. So, when vetting new clients look for warning signs that they might be bad payers.

Of course, there is no foolproof way to find out if a customer is going to withhold payment. But you can take steps such as asking for part-payment upfront, consider how professional they seem initially, and even ask around your industry to get a feel for the client’s reputation.

We hope you’ve found these tips useful. And we hope you’ll never need to use more than a few of them to get the money you’re owed! If you enjoyed it, sign up to our newsletter to get all the latest news and features first.

 

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