How to Handle a Late Client Payment

By Danielle Liss
Updated: February 23, 2017
Categories: ,

Does your ideal client relationship look like this?

  1. Enter contract with client.
  2. Complete your deliverables.
  3. Exceed all of the client's expectations.
  4. Get paid.
  5. Get a request for a new project with an expanded relationship.

Sounds perfect, right?

Except sometimes, it doesn't go that smoothly and you hit a stumbling block when it comes to payments. Specifically, late client payments.

We know how much anxiety this can cause, especially for a small business owner. If you ask friends and peers, you may feel like you're getting advice from a very NSFW Rihanna video.

But, before you take any more extreme measures, there are a number of things you can do to make the process easier on you.

Here are our steps for dealing with late paying clients.

Check Your Contract and Verify Payment Terms

Before you panic over a late payment, check your contract and verify the payment terms. Some clients may have a longer time period for payment built into their contracts. Always confirm you followed the payment protocol listed in the contract (whether it was sending an invoice or other communication with their Accounts Receivable or Finance department). Then, calculate the due date to ensure you've allowed adequate time for receipt.

Touch Base with Your Client

If you reviewed your terms and the payment is definitely past due, first, touch base with your client. If you've worked specifically with one person, reach out to them to ask for the status. If your primary method of communication was email, try an email first. Here's a sample.

Dear Contact,

I hope you're doing well. I'm so pleased with the results we achieved on the project and it was a pleasure to work with you.

Based on the contract, I sent an invoice dated XX and payment was due on YY. The payment is now a week past due. Please let me know when I can expect to receive the payment.

Thank you,

At this stage, definitely keep it friendly. The check could easily be in the mail. Someone could have been out-of-the office dealing with an emergency.

Tip: When sending this type of email, use tracking to see if they have opened it. Many tools are simple Chrome extensions, like Boomerang. Yesware is also a great paid option. 

Escalate Your Outreach

If you haven't gotten a response from your initial inquiry, definitely see if you can escalate within the company. While you may be working with a particular contact, it's a good time to investigate other people who may be able to help.

If you have information for another contact, definitely reach out to them. Also, check the client's website to see if you can find the name and contact information for someone who works in the finance or accounting department. They are often able to give you an update.

Next, we recommend making a call. We know that this is not a popular option with some online business owners, who prefer to do all of their business via email. However, this is a time when it definitely helps to pick up the phone. Emails may get lost in someone's inbox, so a call can serve as a good reminder that they need to follow up with you.

Send One More Email with a Firm Due Date

If you've sent emails to all possible contacts and followed up with calls, we recommend sending one more email with a firm due date. Here's a sample.


I've reached out a couple of times recently to inquire about the status of my payment on the X project. I emailed on [give dates]. I also called to connect with you on [give dates]. Please provide an update on the status of the payment by no later than [give date].

Thank you,

Send a Certified Letter

If they continue to ignore your emails, we recommend sending a certified letter as your next step. Make sure you get a receipt for the delivery.

Within the letter:

  • Introduce the project you worked on and advise that all work was completed
  • Provide details about the payment and contract. (e.g., you were invoiced on XX and, pursuant to the contract, payment was due by YY.)
  • Outline the attempts to contact. Provide a list of the dates and individuals that you attempted to contact.
  • Provide a due date
  • Advise of your next steps if payment isn't received

To ensure that you are compliant with collections laws, do not threaten them with an action that you don't intend to take. In other words, don't say “If I don't receive payment within 30 days, I will be forced to file a lawsuit,” unless you plan to sue.

Send to Collections or File a Lawsuit

As a final step, consider sending the matter to a collections agency. (They will keep a percentage of any amounts they collect.) Additionally, you may be able to file a lawsuit to collect the sums that are owed to you. Depending on the amount of money owed, you may be able to file in small claims court, but this amount varies by jurisdiction.

We recommend that you consult with a lawyer to determine your next steps. In many cases, a lawyer can also assist you during the collections process by sending demand letters.


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