Your Client Hasn't Paid - What Happens Now?
Don't immediately go to war. Follow the escalation steps below to determine precisely what you can do to maximise your chances of recovering the money.
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Don't Burn Bridges Because You Weren't Paid On Time
I was following a conversation in a freelancer group recently. Someone mentioned they hadn’t been paid on time and wanted advice about the next steps.
The responses shocked me. Many suggested starting to send legal letters or strongly worded emails reminding the client of their legal obligations and the penalties for not paying.
I understand that not being paid on time can be frustrating, but to be frank, it’s also a fact of life.
If you immediately go to war, you probably will be paid — but you’re far less likely to work with that client again. That’s a lose-lose for everyone.
Far better to follow a different process to get paid.
Don’t Send Your Invoice At The End Of A Project
Never wait until the entire project is complete before sending an invoice.
Always either take a deposit (often 50%) or get paid on a monthly retainer.
There are many apparent reasons for this, but the biggest is you must test their ability and willingness to pay.
You must ensure your contact has the authority, knowledge, and willingness to pay for your services.
Three years ago, I agreed to a large contract with a new organisation that would transform skateboarding. They had a tight timeframe, so I sent the initial invoice for the deposit and got started. Two weeks later, it still hadn’t been paid, even though I was constantly assured it would be paid the next day.
After two more weeks of chasing (but not working), my contact said they were still waiting for the investors' money to come through before they could pay the invoice. They hadn’t once mentioned paying me relied on someone else - essentially shifting all the risk onto me.
The investors never came through, and I never got paid. But not getting paid for two weeks of work is much better than not getting paid for six months.
This is why you always ask for a deposit in advance.
(failing that, work on a monthly retainer where you get paid at the end of each month)
Four Types Of Non-Payment
We can separate non-payment into four areas.
Can pay > wants to pay > but hasn’t paid. This is usually an administrative problem. They are usually the easiest ones to resolve.
Can pay > doesn’t want to pay. This happens when a client isn’t happy with the work.
Can’t pay > short-term money issue. The client is financially squeezed and needs to delay payment.
Can’t pay > doesn’t have the money. This is the most severe situation. It occurs when the client is about to go out of business.
Let’s go through each of them.
Reasons For Non-Payment
We can separate non-payment into two specific areas:
Disputes Over Deliverables
The client isn’t happy with the work and refuses to pay.
In this case, you weigh the importance of the relationship vs. the additional work required to make the client happy and make a judgment call.
If you try to fix it, then constant clarification is key.
Either you do what is necessary, assuming this works in your favour. Or you go stay firm and explain how your work precisely meets what’s listed in the contract (in the full knowledge you will never work with the client again).
Honestly, it’s usually best to make the changes.
Dealing With Administration Problems
In my experience, if a client doesn’t pay on time, it’s usually due to incompetence.
Either you didn’t provide the correct information to get paid, or something jammed up in their system and prevented payment.
Generally speaking, the more complex the system you’re forced to use (e.g., Ariba 😢), the more likely you are to forget to tick a box or provide the correct W9/W-8BEN form to get paid. You might also have failed to give the correct PO number or address the invoice to the right person.
For major international clients, you often need to provide silly things like voided cheques showing your bank information or bank details on headed paper…It’s also likely that you (or they) have the wrong international bank details.
At other times, it’s a mistake on the client’s side. They didn’t approve you, missed the payment schedule, or didn’t do it in time.
The key thing to remember here is this:
The person you’ve been working with is often not the person who pays you. Don’t burn the bridge with the former because of a mistake made by the latter.
The best way to resolve this is to adopt a collaborative approach (see our escalation steps below), identify the source of the problem, and fix it. Getting angry and combative will usually cause more problems than it solves.
Quick Tip: Don’t Send Invoices In Email Threads
A common problem is invoices getting lost in email threads.
If you’re sending an invoice manually (i.e., not using their system), send it in a separate email and ask them to confirm that they’ve received it. Following this simple principle could have saved me a lot of trouble over the years.
Ultimately, incompetence (or errors) are usually simple to fix if you both begin with a presumption of good intent.
Refusing To Pay
We can break refusal to pay down into two categories: stalling and disputes.
Stalling/Ghosting Payment
This is most common in small business owners who prefer the money to remain in their account for as long as possible (or are simply trying to avoid the issue of paying their bills).
One of the downsides of working with small businesses is dealing directly with owners who struggle to separate their money from their business’s money. Every payment stings a little—it’s money going out of their bank account, and it’s their net worth declining.
As a result, some people try to delay payment. The benefit of stalling is simply earning additional interest and having the money in their account in case it’s needed elsewhere. In this case, they might keep promising to pay the invoices but never actually do.
A more common scenario is for the client to ghost you. They will reply increasingly sporadically, make some excuses, and then stop responding altogether. Trust me, if the client ever uses a phrase like “haven’t had the time” to explain why they didn’t process the invoice, they’re stalling.
Paying an invoice takes minutes. No one’s day is so packed they don’t have a few minutes to process an invoice. I suspect some of these folks are hoping the freelancer/consultant will simply give up and disappear (a little like how airlines behave when they have to pay compensation).
You will almost always get paid in these situations if you follow the escalation steps below.
Simply follow the escalation steps below to get paid - and don’t work with these folks again.
Disputes Over Deliverables
The more challenging scenario is when the client isn’t happy with your work.
In this case, they might refuse to pay until you make the changes they request (or they say the work wasn’t good enough and don’t pay).
Sometimes, this is a tactic (the client has run short of money and is trying to escape their obligations). But, usually, it’s the result of miscommunication. If you follow the principle of constant clarification, this outcome will be impossible.
However, if this happens, you need to:
Check the contract and the acceptance clauses to ensure you’ve done what you needed to do. You need to be sure you’ve met the obligations and specifications on your side. If not, then the client is in the right and you need to complete the work.
Scope out the change the client needs. Get a precise list of changes the client needs to be satisfied and scope out the time and effort this would require.
Decide whether to make these changes to keep the client happy for the long term or refuse them because they are out of scope. There is no correct answer, but a little flexibility can go a long way.
Make the changes or jump to level three on the escalation steps. If the client requests additional changes, say no. Now, you jump to the firm reminders and begin the escalation process.
Inability To Pay
The most worrying scenario
The inability to pay falls into two categories, which are very much related.
Short-term financial problem.
This is when the client says they can pay, but not right now.
This also breaks down into two categories.
Accounting periods. Sometimes, this can be a genuine outcome of departments having to spend money in specific accounting periods, and you need to wait until the next (although this should have been communicated in advance).
In this situation, you need to get a specific date for when the payment will go through. If that is within six weeks, I’d usually accept it. If you have terms in your contract where non-payment incurs a fine, communicate this to them and enforce those provisions.
It's not acceptable if they didn’t communicate this in advance. I’d also consider delaying any further work until you have been paid.
Short-term liquidity problem. This occurs when the client says they don’t have the money to pay you immediately and must wait until [future date].
You should be very concerned in these situations. It means you and the client are waiting for an external event to pay you. In my experience, these external events are often unlikely to happen.
In this case, offer a payment plan (receiving something is better than nothing). Break the payment structure down into 1/3rd payments over several months. This eases their liquidity issues while still getting you money.
I’m flexible if a client wants to pay in one quarter vs. another to suit their budget, but I’m inflexible if the client says they don’t have the funds to pay me.
If the client cannot stick to a payment plan, follow the escalation process to small claims court or debt collections to enforce the terms of the contract.
Long-term liquidity problem. If the client says they cannot pay the invoice, that’s when the alarm bells should be ringing. At this point, you’re no longer a freelancer/consultant but a creditor.
There is a strong likelihood that the company is going out of business, and you need to follow the escalation steps below to get paid before that happens (because it’s incredibly hard to get funds back afterwards - especially from small businesses with no assets).
Keep an eye on the company’s status and make a bankruptcy filing if the company declares bankruptcy. Specifically, look at:
Bankruptcy Court Filings: Search the records of bankruptcy courts in the country where the company is headquartered. For the U.S., you can access filings through the Public Access to Court Electronic Records (PACER) system.
Government Business Registers: Many countries have government registries where companies must declare bankruptcy. For example: UK: The Insolvency Service, Canada: Office of the Superintendent of Bankruptcy (OSB), Australia: Australian Securities and Investments Commission (ASIC)
What Should You Do If You Haven’t Been Paid?
Never Be Relaxed About It
While you shouldn’t be immediately combative, you shouldn’t be relaxed about non-payment either.
Promptly following up on invoices is a sign of professionalism. You haven’t been sloppy anywhere else, so why start here? If you delivered the work on time, invoiced on time, and were professional everywhere else, you should see it through.
However, the most crucial reason to follow up the week after payment has not gone through is that things can suddenly change.
Last year, we worked with a client that laid off the entire team we were working with, and we had $70k in outstanding invoices.
This creates a worst-case scenario where we might need someone we’ve never interacted with to approve and process a hefty invoice. Fortunately, our contact processed the invoice before leaving.
Still, justifying costs to people you’ve never met can be dangerous, especially when the organisation wants to save money.
(If you’re working with smaller organisations, you want to get paid quickly because there is an ever-present risk of them running out of money).
In this case, you need to follow our escalation steps:
Escalation Steps To Get Paid
The escalation steps are a series of steps and actions you take to get paid.
They begin with a presumption of good intent and gradually escalate in firmness to legal action.
I’ve followed these steps with great success in fifteen years of consulting.
Level 1 - The Collaboration Approach (one week late)
The first step is to assume good intent and check that there isn’t an administrative error. This usually involves a message like:
Message:
"Hi [Client's Name],
I hope you're doing well. I just wanted to check in to see if there’s been any issue with processing the invoice I sent on [date].
If you need any additional information or documents from me, please let me know, and I’ll be happy to provide them.
Looking forward to resolving this together.
Best regards, [Your Name]"
Level 2 - The Kind Reminder (two weeks late)
The second step is to still assume good intent and ensure this hasn’t been forgotten.
Message:
"Hi [Client's Name],
I hope this message finds you well. I wanted to follow up on the invoice I sent on [date] for [amount].
As of today, I haven’t seen the payment come through. Please let me know if there are any issues or if you need me to resend the invoice. I’d appreciate an update when convenient. Thanks so much!
Best, [Your Name]"
Level 3 - The Firm Reminder (three weeks late)
Now, we have started to get more firm about the reminders. If there hasn’t been a positive response (or any response) to either of the above, we start to be more specific about a date when the legal process begins.
I also typically cc this reminder to other contacts in the company (especially my contact’s boss). I once cc’ed a final reminder to investors, sponsors, and others of an organisation that didn’t pay me - I was paid the next day.
Message:
"Hi [Client's Name],
I’m following up again regarding the invoice sent on [date] for [amount], which was due on [due date]. Please note that payment is now [X] days overdue.
I’d appreciate it if this could be resolved by [specific date]. If there’s a problem processing the payment, let me know so we can address it quickly. Thank you for your prompt attention to this matter.
Best regards, [Your Name]"
Level 4 - The Final Reminder (one month late).
This is the final reminder in which we assume good intent. This should be no more than 30 days after the payment is due. We also highlight the late payment fee in the contract here.
Again, I cc this to almost every contact I have at the organisation who might be of some use and track down an email address of accounts payment to send to them. If there is a legal email address, I might make use of that too.
Message:
"Hi [Client's Name],
I hope this message reaches you well. This is a final reminder regarding the overdue invoice sent on [date] for [amount]. Payment was due on [due date], and it has now been [X] days overdue.
If payment is not made by [specific date], I will need to explore alternative ways to recover the outstanding amount. Please treat this matter as urgent and confirm once the payment has been made.
I would also highlight the late payment fee in the SOW for which late payment incurs a 1% interest fee which we will now need to charge.
Best regards, [Your Name]"
Level 5 - The Legal Email (5 weeks late)
You can skip this email, but I like to let the client know if a letter from my solicitor is incoming. The letter itself will be sent by email and recorded post so we can be sure they received it.
Message:
"Dear [Client's Name],
I am writing regarding the unpaid invoice [invoice number] issued on [date] for [amount], which is now [X] days overdue.
This email serves as a formal notice that if payment is not received by [specific date], I will be forced to initiate legal proceedings to recover the debt. I have attached the invoice and all relevant documentation for your reference.
Please confirm receipt of this message and the payment status.
Regards,
[Your Name]"
Level 6 - Publicly Shaming
One of the quirkiest things about the web is that you will often find people who are not responding to your request for payment but are still actively engaged on social media.
When this happens, I like to jump in on the conversations or anything they’ve shared to remind them of their obligations. In response to discussions or anything else they’ve read, I’d write:
Message:
"Dear [Client's Name],
I noticed you are still engaging here but haven’t replied to our repeated requests for payment of the money you owe us. Please be mindful that there is a considerable sum of money outstanding and I’m disappointed you haven’t chosen to address this issue with us.
Contact me to resolve it please, before we are forced to pursue legal channels to recover the money.
Best regards,
[Your Name]"
The three times I’ve done this, I’ve all been paid quickly. It turns out people are apprehensive about their public perception.
Level 7 - Shaming Twice
I’ve never taken this step, but I’ve noticed others have with mixed success. If you’re not going the legal route, this channel is an alternative.
Message (Public Post Example):
"I have always valued my professional relationships, but I must bring attention to an overdue invoice from [Client/Company Name] for [amount], issued on [date].
I’ve made multiple attempts to resolve this privately without success.
This serves as a final appeal to settle the outstanding payment before legal action becomes necessary. I hope to resolve this soon.
Sincerely, [Your Name]""
Level 8 - The Legal Letter
This is the official letter you hire a solicitor (or use a service like Lawbite) to create.
You must send this letter by recorded mail to ensure the client has received it. You will need evidence it didn’t go missing.
Message:
"Dear [Client's Name],
This letter is a formal demand for payment of invoice [invoice number] issued on [date] for [amount], which is now [X] days overdue.
If payment is not received within [specific timeframe, e.g., 7 days], I will have no choice but to escalate this matter through legal channels. This letter may be used as evidence should court proceedings become necessary.
Please process the payment immediately to avoid additional costs and complications.
Sincerely, [Your Name]"
What Do You Do Now?
At this point, you have a decision to make.
You can genuinely follow through on your threat to pursue this legally. In this case, depending on where you live, you can hire a debt collection agency or file a claim in small claims court.
The problem with this is it can be so costly and time-consuming that it’s often not worthwhile. However, if the amount is significant or you can’t emotionally let it go, then contact a solicitor and go ahead.
However, over the past fifteen years, I’ve followed the steps above to ensure that all but two organisations paid one. One organisation owed me a small speaker fee and went out of business; the other never paid the initial deposit to get started. Neither was worth pursuing.
Good luck!
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