Getting paid on time, or even at all, is one of the biggest hurdles SME business owners face, writes Dara O’Leary.
“Remember, it is your right to be paid for the services you provide. Do not hesitate to take action to recover the payment you are owed”
Not getting paid by a client can be a challenging situation for a business owner.
Here are some steps you can take to try to resolve the issue:
Review the contract or agreement
Review the contract or agreement that you have with the client to make sure that payment is due and that you understand the payment terms and due dates. Learning point – If you do not have a written contract in place make sure in the future, you protect yourself and your business by creating a detailed contract that outlines payment terms, late fees, and consequences for non-payment. We have all been there at some point and it can either be a costly or a lesser impact lesson, depending on the sum involved. It can be helpful to speak to other Business owners who will have experienced this at some point themselves.
2. Send a polite reminder
The first step should always be to send a polite reminder to the client about the outstanding payment. Often, it is a simple oversight, and the client will promptly pay the invoice. If the payment is simply late, you can send a payment reminder to the customer to remind them of the due date and the payment terms in the agreement.
3. Follow up with a phone call or email
If you do not receive a response or payment after sending a reminder, follow up with a phone call or email. You can ask if there are any issues with the invoice or if they need more time to pay. Be professional and polite in your communication, and try to understand their perspective.
4. Negotiate a payment plan
If the client is experiencing financial difficulties, you may be able to negotiate a payment plan that works for both of you.
5. Look at alternative forms of payment
If the client is unable or unwilling to pay by traditional means, consider alternative forms of payment, such as partial payment, trade, or bartering of services.
6. Take legal action
If the client refuses to pay or the issue cannot be resolved through other means, you may need to take legal action. First consider the impact here to your brand, reputation, your own peace of mind, if it may become a protracted back and forth, the cost of chasing legally versus the cost of the loss, and whether taking all of the forementioned into account, it would be more prudent to let it go on this occasion. If having considered all the above variables, and it is something you need to pursue, consult with a Solicitor to understand your options and the process for pursuing a legal claim.
Keep accurate records and documentation of all communications and transactions related to the payment issue, as this may be useful if you need to take legal action. It’s also important to consider your approach to collections and whether it aligns with your overall business values and reputation.
Remember, it is your right to be paid for the services you provide. Do not hesitate to take action to recover the payment you are owed.
