You are not alone when dealing with uncooperative customers.
Not by a long shot. Check out hilarious website Clients From Hell, a collection of anonymously contributed client horror stories. People’s tendency to avoid their bills, coupled with the rough economy, might have you personally going through hoops with clients to get your money.
Start building trustworthy relationships with your clients.
Avoid shady customers who make you chase your money. Require a signed contract explaining actually what they will receive for their investment. The most fool-proof strategy against non-payment is to receive a deposit. If you are a respected business, there is no reason you shouldn’t get 50% or more up front.
When payment approaches, send the client a friendly reminder.
You could put an automated system in place to contact clients within 24 or 48 hours of payment to remind them if they forgot. It should be a simple letter stating the details of the invoice, the work you did for them, and how much you are entitled to. If the client’s card is declined in your automated system, send an e-mail right away asking for another form of payment.
Contact the client if payment isn’t received
If it’s been about two weeks after the deadline and still no payment, begin reaching out to the client. Try not to use e-mail, as it will likely be ignored. If they don’t respond to the first e-mail, do you really think a second e-mail will do anything? A telephone call or an in-person meeting will yield better odds of payment, especially for upcoming businesses not looking to lose clients.
Ask the client why they have failed to pay for your services.
Was there any problems they had with your product or service? Are they confused about how or when to pay? Agree on a date of payment and go from there. Often times, the client has been on vacation or incommunicado. Give a short grace period in case of a client emergency. You don’t want to lose a potential long-term relationship over one late payment. If it’s been a month or more, it’s time to send a serious reminder.
Send a warning letter through the mail.
If multiple outreaches fail, you need to file a formal letter through the postal service. Be as polite as possible because getting angry at the client will get both parties nowhere. Don’t write off these customers, but let them know you are not messing around. Let them know when late fees and interest will commence. Every state and country has their own legal situation in terms of how much you can charge for overdue fees. Most American states have a statutory interest rate varying between 6 and 10 percent annually.
File against the client in small claims court.
If the client refuses to pay or doesn’t show up in small claims court, you should be awarded the right to secure most or all of the debt. The client’s credit score should worsen as well. It would also be wise to file a complaint with the Better Business Bureau.
Think very carefully before taking a client’s website offline.
This will certainly force the client to call you, which is positive, but this could be seen as a bad business move or even a breach of contract depending on the terms of conditions. There are tools available online, such as the CSS Killswitch, which non-destructively blacks out a difficult client’s website with the click of a button. This is a last resort option, as it may end the relationship without you getting paid.
Never complain about clients on the Internet.
Be professional when discussing clients payment problems. If someone calls your company out on a forum or a social network platform, respond accordingly, but do not air their dirty laundry. Others will see how your company acts and if they see you acting aggressive, they may be wary to engage with your business in the future.
Lastly, a good rule of thumb is to thank your loyal, paying customers from time to time to let them know you appreciate them not making your life difficult. Be sure they realize your appreciation for their good business and prompt payments. These are the clients who will continue to help take your business to the next level.
Jared S. is the technology writer for Surpass Hosting. Become a fan of Surpass on Facebook and Twitter.
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