Client Talk is our weekly advice column about the trial and tribulations of working with difficult clients. If interested in submitting a topic or question for this column, then do so through the link above.
I have a client who is several months behind on his invoices. We've been working together for only year, and this problem has only started several month ago. What should I do? How do I collect without losing the client permanently?
At first, start off with a few reminders, and send a reminder with each invoice that you send. It's possible that the client has simply forgotten to pay, and isn't trying to take advantage of you. It's also possible that the client has run into hard times, but you wouldn't know that unless you attempt to communicate the problem with your client. If there's simply been a mistake or a misunderstanding, then you want to be cordial so you don't risk the business relationship.
If it is hard times, then be flexible and maybe work out a schedule for payments. Work might have to be cancelled or postponed, but it certainly saves the client from additional invoices piling up, and it saves you from wasting time doing work the the client can no longer afford. Again, being cordial and flexible puts less risk on the relationship. Even if work is postponed or terminated, by being professional about the situation, the client could return to you for work.
If it comes to the point that you do need to issue an ultimatum of some sort, where the client is refusing to pay or your communications have gone unanswered, then this template of a "pay-or-die letter" will come in handy. The letter threatens to bring in an attorney unless payment is made, or some arrangement is made to make payment. The letter should also include a cancellation of work if payment isn't made in a set amount of time. It has proven effective in getting delinquent clients to cough up something, if not everything that they owe.
Depending on your situation and the amount of money owed, a lawyer might not be worthwhile. A collection agency might be your best bet, but it would depend upon how much money is owed and the specific situation. If your client happens to be a foreigner, for example, then you might not be able to recoup anything. If there's no contract between you and the client, then your story will have troubling finding any legal standing.
What do you think of this response? What would you do in this situation?