Hi [Client name], As we haven't heard back from you regarding the invoice due on [X date] or any of our follow-up messages, we'll have to refer the matter to a collection agency by the end of this week unless we receive a response from you before then detailing when you will pay the full invoice amount. Sadly, we can't offer any more payment extensions since the invoice has been due for [amount of days or weeks] already. Sincerely, [Signature]
This is where things get tricky – dealing with collections agencies can be a hassle for you as well. In many cases, you might have to write off the unpaid invoice as a loss unless it’s for a considerable sum and worth chasing down.
For invoices of a few hundred dollars or less, it might take a while to receive any payment. After the collection agency’s fees, the amount might be negligible.
The goal here is to make sure the other party knows you mean business. Once talks deteriorate to this level, even if you do get paid, we don’t recommend you continue working with that particular client.
How to deal with non-payments
At one point or another, you’ll deal with clients who refuse to pay invoices and ignore you all together even after multiple follow-up emails. In these cases, you have two choices:
- Write off the loss if it’s a small amount of money.
- Take action for more sizable invoices, which often means hiring legal or collections aid.
We’ve already talked a bit about collections agencies, but there are other resources at your disposal, too. One option for unresponsive clients is to pay a lawyer to send a legal notice concerning non-payment.
For many people, a legal notice might scare them into getting in touch with you and paying overdue invoices. However, if you’re a freelancer dealing with clients in other countries, your hands are pretty much tied.
Local clients, on the other hand, are easier to follow up with. Depending on how much money you’re owed, another option is to try to take them to small claims court. Unlike collection agencies, you might be able to receive payment for the entire bill. However, the process is likely too cumbersome unless the invoice is for a large sum.
Ultimately, it’s important to know when to give up on collecting on unpaid invoices. If you spend months or years chasing debtors, that’s time you take away from the clients who do respect your work. It’s only natural to be angry about not getting paid, but it’s not worth taking additional losses by missing out on other work.
Conclusion: how to collect on unpaid invoices
Dealing with difficult clients is a skill you need to hone if you intend to stay afloat for long. Whether you’re a small business owner, a freelancer, or a contractor, you’ll run into the occasional client who tries to weasel out of payments.
How to deal with these invoices will depend on your relationship with each client and how late they are. For those with strong track records, one late payment might not be a big deal. However, for those who regularly ignore bills, you need to be proactive and possibly reconsider your contract.
Do you have any questions about how to collect on unpaid invoices? Let’s go over them in the comments section below!
