So Your Client Hasn’t Paid – Now What?

Business Tips
I'm Neesa

After nearly a decade at a prestigious global law firm, I said goodbye to the cold corporate hallways and set out on a mission to breakdown barriers and equip women-led creative businesses like yours with premium legal tools and quality resources to help take your business to the NEXT LEVEL. 


Snag Your Free Client Contract Checklist 

Gimme that

TOp categories


A new business, a business of your own, is a bright, shiny, and mesmerizing thing. And it’s true: owning your own consulting practice, coaching gig, design firm, copyrighting agency or you name it has plenty of pros. You get to be the boss and set your own terms. Autonomy in business ownership does have another side, though. While we would prefer to be eternal optimists, you deserve some honesty, which is why we’ve assembled these business tips around payment.

If you’re the boss, you will have to handle some tough stuff, too. Perhaps one of the first wake up calls service providers get is when an invoice goes unnoticed, unmentioned, and, yes, unpaid (gasp!).

We hope your client contract was rock solid, because that is your primary recourse if this occurs. What we don’t want is for you to lose heart so, before you jump the gun and pursue legal action, here are the basic steps you need to take if a client hasn’t paid.

Business Tips

Business Tips to Avoid Non-Payment: Set Clear Expectations 

You know we’re not giving up, even if we sound like a broken record: you should have a contract signed, ink dried, before you begin working for a client. This contract should include clear parameters around the work you will perform and the process of payment. Don’t trust Google on this one.

Client Contracts and Payment Terms

Client contracts are one of our specialties. Good contracts are thorough, concise, and help you legally level up your business. We dedicated a whole branch of our business to developing contracts for business owners, freelancers, coaches and emerging entrepreneurs. This is part of our mission because the creative economy is blowing up, and we want all of you — who bring so much hustle and heart — to succeed.

Our overarching recommendation is that you buy a lawyer-drafted legal contract template or, if you’re able, instruct an attorney to draft a client contract for you. Your business baby is worth it.

Any client contract you use should include the following:

General Terms

A contract needs to clearly state who the parties are, what their defined roles and titles are, and delineate the nature of the relationship.

Scope of Work

It is important that a contract clarifies the scope of work, in other words, what each party is expected to provide or deliver. This is important because scope creep is real, and you’ll quickly find clients who are eager to push the boundary. Pointing them back to a contract is a great, objective means of self-preservation. Go on, protect your zen.

Deadlines and Schedules

The timeline of work is important. Without defining when things are due, and the regular cycle of work, demanding payment is difficult. It would be all too easy for a client to come back and say that an ongoing project is unfinished if you haven’t established milestones that you can prove.

Payment Schedule

You can set up a payment schedule in many ways. Some independent biz owners use either a net 15 or net 30 arrangement, billing clients either every two weeks or every month. For ongoing projects, there may be a deposit up-front followed by monthly payments or payment upon task completion. Retainers are another payment arrangement, which also relates to scope of work and scheduling. Whichever approach is best for you, it must be clearly stated in your contract so you have legal footing to stand on if an invoice isn’t paid.

Preferred Payment Method

While the “I didn’t know how to pay you” explanation for a late invoice could, in very rare cases, be true, it shouldn’t be. A preferred payment method, either via invoice or ACH or otherwise, should be stipulated in your client contract. Keep in mind that if you change billing methods, banks, or payment providers, you need to make an update to this.

Late Payment Policy

Business owners want to spend their time, well, doing business, not chasing down clients for money. Late fees are inherently incentivizing. Like you, clients don’t want to spend time or money on things that don’t benefit them. If you need to turn up the heat on a client who won’t pay, having a black-and-white late payment policy is your best first step.

Interest Rates/Late Fees

Late payments may not be a flat fee. If you’ve set up interest rates for late fees, clients may rack up exponentially higher charges the longer they delay. This may require more legal firepower to defend, but if you are serious about on-time payments, it’s a clause worth considering.

Business Tips to Ensure Customers Pay On Time, Every Time

Business Tips to Ensure Customers Pay On Time, Every Time

In case you’re feeling a little cringe about this whole thing: we get that. No one likes this. No one wants this. So before we get to the hard part (forcing clients to pay), let’s talk about how to avoid the situation altogether. There are ways to make your life easier during monthly invoicing, and ensure that clients are given every opportunity to settle up before things get rough.

  • Nurture client relationships — People do business with people. That is an important factor to keep in mind as you face the prospect of a client that won’t pay. The better relationship you have going into this scenario, the more emotional collateral you can cash in to get them to cash out. We all want to treat clients well because it’s the right thing to do; but it also has the added benefit of inspiring them to do the right thing in return.
  • Retainers — Retainers are flat monthly fees that secure a certain amount of time or work. If you are on a retainer agreement with a client, they will be paying you a predictable amount. Sometimes, late-paying clients are just (TBH) flakey or forgetful. Retainers can make sure you get paid on time, because they can be set up to autopay the set amount.
  • Ask for deposits for large services — If you are heading into a large or lengthy project, like a website build, re-branding project, or a corporate consulting gig, you will probably want to split up payment and ask for a down payment or deposit. Getting this money up-front is a good way to avoid regular installment payments altogether, or to help cover any out-of-pocket costs associated with launching the work.
  • Allow installments — We know we just said that deposits are good because they help you avoid regular installments, but for a client who is unable to pay the full invoice, installments are a possibility. In this scenario, a client may simply have miscalculated their budget, fallen on hard times, or have another financial reason they can’t pay. If it’s within your ability to do so, you may wish to cut them slack and allow installment payments until they’re caught up.
  • Don’t let debt build up — In a similar vein: don’t let debt build up for a long period of time. It’s one thing to have someone pay three days late. Three months? That’s on you. You must stay on top of your bookkeeping and be fully aware if a client hasn’t paid, then take active steps to correct the situation.
  • Don’t make excuses — No one goes into business with people because they love drama. Let’s be real, unless it’s on Housewives, no one loves conflict at all. But avoiding conflict, or making excuses for why you haven’t pursued payment, hurts you and your business. Be bold. Be brave. Be the badass entrepreneur you are and make sure you have legit contracts that will back you up.
  • Plan ahead — Lawyers are trained to anticipate worst-case scenarios then build contingencies around each scenario. It doesn’t hurt to think like a lawyer and anticipate a non-paying client. You don’t have to be a pessimist to see this as a possibility. Before it ever happens, you can lay the groundwork for recovering profit by putting the aforementioned elements in your contract, and having a roadmap for how you will react if a client doesn’t pay.
  • Stay in touch — It’s one thing for someone to ghost you after a Bumble chat. But if a client ghosts you, you know you’re in trouble. Clients will avoid you if their bills are overdue. It’s why collections exist. Stay on top of them. 
  • Be organized — Clients may hem and haw about paying, and try to misdirect you by asking about delivery dates on work, or something said in a vague email conversation, or… well, the list is endless. They’ll be creative if they don’t want to shell out for your services, but you should be on the ball. Organization is your friend, as it will arm you with an accurate, ready response to every accusation or question. 
  • Give early payment discounts / use factoring — Late payment fees are the incentive we mentioned that’s a negative reinforcement moment: early payment discounts are a positive reinforcement moment. No, clients aren’t your kids, but the psychology checks out. You don’t always have to have clients paying in the rears: knock off a few bucks and let them pay you early. That way, you’ll never worry about them paying you late.
How to Handle Non-Paying Clients

How to Handle Non-Paying Clients

Alright, got your kicking boots on? Saddle up.

Here are the tactics to employ with non-paying clients:

Stop Work

We are not all lionesses, at least not on the outside, so you may be timid about even this step, but let us say it loud and clear: stop working for clients who have not paid. Let them know that you will resume their project once their invoice has been settled.

Reach Out in Real Time

If you’re able to remain calm and friendly, get proactive and call them to reach a mutual understanding. Either way, choose how you reach out to them wisely and be persistent – schedule a weekly follow-up email or call into your calendar.

Clearly Communicate 

You need to have your plan ready, and communicate in very plain, impossible-to-misunderstand terms:

  • You have a payment that was due on this date for this much
  • That payment is now overdue and must be paid immediately
  • According to your contract, the penalty for not paying on time is XYZ
  • From this point forward, you are accruing X amount in late fees or penalties

Stick to Your Timeline

Sometimes, a client will respond to you with, “oh, we switched billing emails,” or “oh, so-and-so has been on vacation.” It’s up to you what you do with that, but we do not recommend shifting your timeline. Respect the integrity of your contract and stick to due dates.

Be Polite and Professional

The saying, “you catch more flies with honey than with vinegar” is a good one, and relevant here. You don’t have to go in guns-blazing to demand payment from a client. They’re your client for a reason. They hired you because they valued your skills and expertise and, in return, you’ve given them your time and energy. So we appreciate that it can feel personal when a client doesn’t pay for your hard work. But don’t burn bridges by threatening your client or trash talking to their face, in the community or on social media. Even if this is the end of the road for your professional collaboration, you can end well by being firm, fair, and remaining friendly.

Avoid Non-Payment: Legal Contracts for ICs and Business Owners

Avoid Non-Payment: Legal Contracts for ICs and Business Owners

Here’s the battle cry of this tense moment: you deserve to be paid. 

“But COVID-19 hit their business hard.”

You deserve to be paid.

“But they’re having huge turnover and internal issues.”

You deserve to be paid.

“But I really like them.”

You deserve to be paid for all of your hard work.

This situation is a bummer. You didn’t ask for it but we hope we’ve equipped you with a few ideas of how you can be your own advocate and handle this sticky situation on your own without having to resort to a collection agency or hiring an expensive lawyer. Sometimes though, handing the reins over to the experts can’t be avoided unfortunately but they should be considered a last resort.

If you’re ready for a contract upgrade to ensure you get paid, shop our lawyer-approved collection of contracts.

After all, we’re all in this together.

*Disclaimer: This blog post has been prepared solely for general information and educational purposes. It is not intended to provide, nor should it be relied on for, legal advice. Should you require advice regarding a specific matter, appropriate legal or other professional advice should be obtained.

+ show Comments

- Hide Comments

Add a Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Imagine what's possible when you don't have to worry about getting paid.

Hi, I'm Neesa.

I traded stuffy suits, corner offices, and corporate boardrooms to serve small business owners and other freedom-seeking entrepreneurs like you from a tiny island in the Caribbean Sea.

Learn more

Start here:

Business Toolkit

The success of our business truly relies on essential tools and software. Here's a comprehensive list of our most trusted, go-to biz resources to help you on your entrepreneurial journey.

See Resources >

Shop Legal Contracts

Feel true peace of mind with secure attorney-crafted contract templates that provide you with a confident legal foundation to grow a thriving business.

Shop Now >

oh la la!

Ready to feel empowered to make the right decisions for yourself now and as your business grows?

We've gotcha covered!

Sign up today to get access to the legal know-how you need to succeed.

Your Cart
Your cart is emptyReturn to Shop
Apply Coupon