Client Not Paying Invoice
When a client isn't paying your invoice, every day matters. Learn the immediate steps to take, understand your legal rights, and discover proven strategies to get paid without damaging relationships.
Immediate Action Plan
- Contact client within 24 hours of missed payment
- Document all communications and payment attempts
- Escalate to formal demand letter within 2 weeks
- File public default notice to protect other businesses
Why Clients Don't Pay Invoices
Understanding why clients don't pay helps you choose the right approach. Most non-payment falls into these categories:
Legitimate Reasons
- • Cash flow problems (temporary)
- • Invoice processing delays
- • Disputes over work quality
- • Missing documentation
- • Approval process bottlenecks
Approach: Professional follow-up with problem-solving mindset
Problematic Reasons
- • Strategic delay to improve cash flow
- • Hoping you'll forget or give up
- • Disputing work after completion
- • Financial distress (permanent)
- • Bad faith negotiation tactics
Approach: Firm deadlines with clear consequences
Immediate Steps When Client Won't Pay
Time is critical when dealing with non-paying clients. Follow this proven escalation process:
Immediate Contact (Day 1)
Contact the client immediately when payment is missed. Don't wait - early action shows professionalism.
Email/Phone: "Hi [Name], I noticed invoice #[X] for $[amount] was due yesterday. Can you help me understand the status? I'm happy to resend the invoice or answer any questions."
Follow-up Call (Day 3-5)
If no response to email, make a phone call. Verbal communication often resolves issues faster.
Phone Script: "Hi [Name], I'm calling about invoice #[X] that's now [X] days overdue. I sent an email but wanted to reach out directly. When can I expect payment?"
Formal Demand Letter (Day 7-14)
Send a formal demand letter with clear deadline and consequences. This creates legal documentation.
Demand Letter: "This is formal notice that payment of $[amount] for invoice #[X] is now [X] days overdue. Payment must be received within 7 days or this matter will be reported to credit agencies."
Credit Reporting (Day 21-30)
File a public default notice. This creates real consequences and often motivates immediate payment.
Result: Public record visible in business credit checks. 87% of clients pay within 7 days of credit reporting.
Your Legal Rights & Options
What You Can Do
- • Stop all work immediately
- • Charge late payment fees (if in contract)
- • Report to credit agencies
- • File mechanics lien (for contractors)
- • Small claims court (under $10K)
- • Hire collection agency
- • Legal action for larger amounts
What You Cannot Do
- • Harass or threaten the client
- • Share confidential work publicly
- • Make false credit reports
- • Charge unauthorized fees
- • Access their property without permission
- • Violate contract terms yourself
- • Use illegal collection tactics
Preventing Future Non-Payment
The best way to handle non-paying clients is to prevent the situation from occurring:
Contract Essentials
- • Clear payment terms (Net 15/30)
- • Late payment fees (1.5% per month)
- • Work stoppage clause
- • Credit reporting rights
- • Attorney fee recovery
Payment Strategies
- • Require deposits (25-50%)
- • Milestone payments
- • Credit checks for new clients
- • Shorter payment terms
- • Multiple payment methods
Stop Chasing Non-Paying Clients
When clients won't pay, create real consequences with public credit reporting. File a default notice that appears in business credit checks and motivates payment.