Small Business Advice: What to Do When a Client Refuses to Pay

Imagine the following scenario: you’ve worked hard to come through on your promise for a client to deliver your product or service, only for them to not pay you – what do you do?

Firstly, you’ll probably feel acute frustration and annoyance at this and you may also feel at a loss as to what to do, particularly as a small business. Well, this need not be the case, there are ways and means for you to get the payment you deserve and in this post you can find some examples of what you can do.

Contact Them

Don’t go in all-guns blazing in the first instance, as the client may have made a genuine mistake. To check if this is the case, you should formally and politely get in touch to remind them that a payment is due and await to see what happens.

If they acknowledge this and then still refuse to pay you, you then need to look into legal proceedings.

Seek Professional Advice

Before you address them from a legal standpoint though, it’s worth getting on board some expert support to help you build your case. A specialist firm like Withers for instance would be able to assess the situation and support you with your endeavours, looking at everything from the contractual law, to what action to take. Such an approach is particularly useful for a smaller business which may not have the expertise needed for handling all this.

Take them to Court

Once you’ve built up a legal case – whether you use external support or not – you can then look to take them to the small claims court; details of which can be found for UK residents on this useful Government page. Depending on whether or not the client then pays, this may be taken a court hearing where the issue will be discussed further and then hopefully resolved.

What to do in the Future

It’s also worth putting in some steps before the payment deadline to help prevent this situation from happening. You may wish to:

  • Send the client reminders of when the payment is due throughout the month
  • Subtly, refer back to any contractual agreements when you first deliver your product/service
  • Make a detailed record of every interaction and schedule you meet

So, work to make sure you get the money you’ve earned and don’t let customers take advantage of you by using some, or all of, the above advice with your small business.