What To Do When A Client Doesn't Pay

I'm sure we've all experienced this once before and if not, you will sooner or later. There are several different steps you can take and do them in any order, this blog is just my process.

The most obvious step is to see what the contract says about late payments, non-payment, and contract termination. If you didn't have one for the project, don't ever let that happen again -- go buy a contract now.

Next, these are the steps that you should follow in this situation:

Remind the client of the contract terms and reiterate the payment clause. You can even send them an additional copy of the contract in case they "lost" it. I just assume my clients have lost everything so I'll always attach documentation in emails of this nature. Give the client about 4 days to respond and resend the email on the 5th day one last time. If you've already sent emails, do this step one last time.

If you do not receive a response after the second email, you can recommend/offer to adjust the payments, split them up, even offer a lower amount and "settle" the balance, etc. This does sometimes work.

Still no response or payment? Your next email will state that if you do not receive payment or communication by X date you will be forced to take legal action. I give them about 2 weeks to respond or make the payment. Once that 2 weeks is up, I inform them that I am now beginning the process for legal action.

I recommend that you type this up on your business letterhead to make it formal and to show you're not joking around and attach it to that email. It's also a good idea to send a physical letter via certified mail so you can prove you did your due diligence before taking legal action and that they were aware of the situation.

You can wait a bit before you do that to see if they respond or finally pay. If you decide to pursue legal action, there are a few different options to do that. You can take them to small claims court, report this to their credit or engage with a lawyer to send a formal demand letter for payment.

Personally, I use Legal Shield and pay $34/mo for business and personal services - I needed a cease and desist letter the other week and if I went with my other lawyer, it would have cost me over $1,000. And, they are real, board-certified, practicing lawyers.

Depending on what the project was, be sure you pause services, do not release any type of work, etc. If they are not paying, but you're still working, you're basically working for free. I also send invoices out before the actual payment is due and not the day of - just like every other business.

Grab our Non-payment Procedure Checklist, but hopefully, you don't have to use it. You can also use the checklist as a timeline of what you did that is 100% ready to hand over to your lawyer if it gets to that point. No need to go back and sort through your overflowing inbox!




1 Reminder email that payment is due per contract - No response after 4 days, send another one

2 No response to 2nd email, send an email offering payment arrangements (optional)

2.1 No response to 2nd email, send an email stating payment is due on X date or you'll take legal action. Write on letterhead and attach to the email

3 Begin the legal process

4 Legal Shield is a great resource - you can take them to small claims and/or report to their credit

5 Stop work until payment is made

6 Send invoices before the due date


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This is not legal or financial advice and does not constitute a client-consultant relationship between you and Montanna Washburn or Urban Consulting, LLC d/b/a Complianceology. The information in this post is true and accurate at the time published and is subject to change at any time. You are encouraged to conduct your own due diligence, schedule a consulting call with Montanna, or speak with your legal counsel.

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