Running a small business has its perks—the freedom to work from wherever you want, choose your own hours, and focus on work that you really love.
But, of course, the good comes with the not-so-good. And one of the downsides of freelancing or starting a business is the risk that your clients won’t pay you on time—or sometimes even at all.
In the dating world, when someone stops calling and seems to have fallen off the radar completely, it’s referred to as “ghosting.” But being ghosted in romance isn’t nearly as traumatic as being ghosted by a client you’ve sent a number of unanswered invoices to.
Know your options if a client doesn’t pay you
1. Don’t jump to the worst possible conclusion
Whether it’s dating or freelancing, it’s easy to expect the worst. You may think you’re down hundreds of dollars simply because you haven’t received a reply from your client.
However, it’s important not to jump to dramatic conclusions. Accusing a client of ghosting you can potentially destroy the relationship and cause you to lose the job completely.
Keep in mind there are perfectly reasonable explanations—perhaps they’re on a lengthy vacation or attending to personal matters. If your client has an established habit of disappearing, they may deserve the benefit of the doubt.
2. Automate resending invoices and charge late fees
Prior to invoicing your client, provide an estimate outlining when and how you should be paid for your work. And when you invoice them, enable online payments. If they can simply pay you by clicking a button, there’s a better chance you’ll get paid faster.
If that doesn’t work, resend the invoice as a reminder. The invoice reminder serves to notify them of the outstanding balance. And if you automate this process, you don’t have to personally handle a difficult email or conversation.
If you sent invoice reminders and your client still hasn’t paid, follow up with a more direct communication, like a phone call. You might even consider including late payment charges on tardy invoices.
3. Contact your client via social media
If you re-sent invoices, reminders, and emails, you may have to resort to another form of communication to give yourself some form of peace of mind. Most companies can be found on Facebook, Twitter, LinkedIn, or in some online capacity.
Contact them through these venues with a simple, polite message to get in touch with you. While being ghosted is never a pleasant experience, it’s important to maintain professionalism—especially since you’re representing your business as well.
4. Send an attorney’s letter
If your clients are still MIA at this point, you should have an attorney draft a letter. Sometimes the idea of legal action can get the client to contact you and, at the very least, make an arrangement to pay what they owe.
You can pay an affordable fee for an attorney letter, or you can inquire through freelance forums. If you’re really in a bind, you may also want to check with legal aid attorneys.
5. Small claims court
As a last resort, consider small claims court. However, these options cost money, so it’s important to weigh how much the client owes you against the expenses of following up. If the numbers just don’t make sense, it might be best to cut your losses and move forward.
Your client contacts you, now what?
If your client finally contacts you and pays what they owe, you can consider the case closed and lesson learned. From there, decide the contract terms that must be in place for the future.
Whether your relationship ends or continues with the client, it’s a good idea to set some new rules going forward.
Consider making it a requirement for a deposit for work, especially for bigger projects. Increase the frequency of payment based on milestones rather than dates. This way you’re able to complete a comfortable amount of work and ensure you’re paid before you proceed.
Have legal contacts and a plan in place in the event a client disappears. It’s easier to deal with it if you take care of all the research before it happens.
Don’t ignore the signs
Like dating, there are obvious signs that a person can’t be trusted. In the excitement that comes with landing a gig, especially a lucrative one, it’s easy to ignore the signs. In both relationships and careers, if something seems too good to be true, it might be. Until you know for sure, it’s usually best to proceed with caution, if at all.
This guest post was originally published on the FreshBooks blog and has been revised for Ideas by We. FreshBooks makes invoicing and accounting painless for millions of small business owners.
