Methods for Dealing with Late Paying Clients

One of the most common problems faced by small business owners, freelancers, and contractors is late paying clients. Clients can really like and appreciate your work, ask for revisions/changes, and keep on requesting more work, without ever paying your dues.  It can get to a point where you feel stuck, and don’t know what to do. Client conversations can scare the hell out of one sometime, so it is best to have a strategy in place for late-paying clients.

Following are the steps you can take to deal with late paying clients:

1. Have a contract in place

The first step in any business relationship is to have a contract in place. This contract should detail the nature of the work/services you will provide, the timeline in which you will provide these services, the payment the client will make for the specified services, and the timeframe in which the client has to make the payment. It can come in handy when things go south, but first, let us see what can be done to handle things smoothly.

2. Know that you are in the right

Before we can even address how to take up the issue of late payments with clients, you need first to acknowledge the fact that it is your right to ask for your money. You entered a contract, made some commitments, worked hard, and delivered on your promise, which means you deserve to be compensated for your time and effort according to the terms agreed on beforehand.

3. Communicate with candor

Now let us come towards the exact strategies you can utilize to deal with late-paying clients. The first thing to do is precisely the thing you dread: communication. If client conversations can scare the hell out of you, the good thing is that you don’t have to do it over the phone or in-person initially.

The first thing required of you is to only email an invoice to the client, and then follow that up with an email reminding them that you are still waiting for the payment. Emails can be followed up by a call if the email is not responded to. Many clients can get busy in some task and forget to pay you, and a simple reminder is enough for them.

Now, whether your client completely ghosts you or actually gets back to you, promises to pay you soon enough, and still doesn’t pay you, you need to contact them again. Along with an email, you need to place a call to them, but this time try and reach a person in the accounting branch who is responsible for handling payments, instead of talking to someone who relays messages coming from above.

You need to have an honest conversation and make the client disclose what is keeping them from paying you. Start by directly asking them if they have a problem with the work/services you have provided and if they want you to modify something (if you are willing to do that.)

Then ask if they are going through some financial challenges and need some more time to make the payment. Be sure to inform them of how late payments are disturbing cashflow within your business and how you have to cut off on personal expenses to meet costs.

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4. Set up a new timeline

In most cases, clients will be going through financial problems of their own. If that is the case, be considerate and allow them as much time as is possible and appropriate. Through mutual negotiation, set up a new timeline for final payments. If it helps, you can break the amount into smaller installations which would be easier for your client to pay.

5. Final steps

If, however, after the phone call with the client, you find out that they are not interested in paying you, or will continue to delay it to eternity, there are serious steps to take. First, stop taking new orders from the client and stop working on their projects. Make it clear to them that they need to clear their dues before you can work for them again.

Keep reminding them of the due amount by sending emails. Next, follow the email by actual letters and ensure they reach the client. This will help you if you want to take any legal recourse.

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When more than three months have passed with no chances of payment from the client, you can decide to stop business with them altogether and forget about your money. In this case, you can post honest reviews about your experience with them on business-related sites. The other option would be to take them up legally.

6. Legal options

While this may seem daunting at first, it is a simple matter if you have the record of all the communication made with the client. However, you will need to check the law in your state to know if you can successfully make any claim. Small claims court systems have a limit on the amount of money you can sue a non-paying client for, which usually falls between $2000 and $10000.

That means you cannot make a claim in a small claims court if the amount your client owes you is less than $1000. Then you will have no choice other than to drop the case and stop all communication with them. However, this is only for cases where worse comes to worst. Mostly, clients respond to reminders about pending payments and pay you your due.

Some Additional Steps to Consider

While dealing with late-paying clients, you can certainly take some additional steps to increase the likelihood of being paid. You can start by making payments easy for clients, by giving them a variety of online money transaction methods and by emailing them the invoice and your company’s account details.

Usually, it is a good idea to follow up on clients after the first late payment immediately. If this is a person who wants to get free work, it would be ideal to figure it out in the beginning and discontinue working on their projects. In many cases, it helps to provide the client with a small percentage of discounts if they submit the payment before time.


While you need to be proactive and take a direct approach in communicating with your clients, you should never take up an angry or rude tone, as that is the fastest way to lose business. Respect your clients, try to be considerate if they are facing real troubles, and be consistent in following up for payments.