What to do When a Client Doesn’t Pay? Pro-tips on how to Collect and live to tell the tale

What to do when a client doesn't pay? We all want to stay friendly when engaging our customers, after all, we were brought up on that  old mantra: “The customer is always right” Well, let’s just say that conventional wisdom does not always apply, especially when you have several hundred or even thousands of dollars on the line because of non-paying customers. But hold your horses, there are a few options you can try before throwing in the towel. Yes, collections can be a tricky side of the game, particularly for small business owners— but we got you covered! Check out these tips just handpicked from the mic of Edward and Joseph Sheehan:

Damage Control: Before doing any more work on a delinquent account, make sure you’re covered.

It may be hard to let go of potential earnings, but there are a couple of reasons why you want to think twice before doing any additional work when a client doesn't pay.First of all, it’s about sending the right message. After all, you want to maintain a long-term relationship with that customer, so think about what’s on the line if a particular one learns that he can get away with hurting your pockets - Your hard-earned cash.So, If collections aren’t done properly, you’re not only telling your client that he can just forget about the account on which he has neglected payment— But it also tells the story of a service provider who does not value his own service. As opposed to letting everyone know that you value what you have to offer AND therefore expect to be paid for it. Period. But, don’t get us wrong here, you CAN keep doing business with a non-paying customer— How? Make sure you’ve got your own self covered. There are two excellent ways to go about this: Either make sure there is a deposit in the bank account for the work that you’re going to do, or that a credit card is on file. 

Thank God there was a contract... Right?

We never get tired of saying it: You have to get a contract in place for each one of your accounts. Contracts won’t only add up to the goal of making sure your customer sees you as the serious Pest Control professional that you are— but also, you can leverage some of its clauses when the time comes for collections efforts to be made.For instance, you can specify late payment fees in your contract, then use those penalties as leverage when negotiating your payment on a delinquent account, by offering your customer to waive the fees if he makes a payment by a certain date. Not only will your customer feel more compelled to pay you, which is the main goal, but also this strategy will make you look good and as someone who is willing to make adjustments for the customers benefit, which turns the collection effort into something that improves the relationship, as opposed to hurting it. 

Come up with a payment plan. 

More often than not, especially with customers who you have been working with for a long time, the reason for them not having made their payments is because they are going through some sort of hardship. Now, while it is unacceptable that your client’s problems become yours, we need to face the fact that if things have come to the point where collection efforts have to be made, then they already have. Therefore it is advisable to talk it out with your client, find out more about what’s causing the delay and try to come up with some sort of payment plan. This is a perfect time to test out your people skills. Make sure you are empathetic but also firm at the same time. Remember in a conversation that revolves around a collections effort - assertive communication works the best. Keep in mind that you are not asking for any favors, but make sure that you also consider your client needs for this one. They will appreciate your concern and be more willing to work it up if they realize that you care for them. Just make sure you handle the conversation well enough so that they are clear on the fact that you care about the good sake of your company also.

Bottom line: There are many ways to skin a cat, make the right choice.

So, to answer the question: What to do when a client doesn’t pay? Well, while it may be true that when you are trying to get paid there are many roads that lead to Rome, it is also true that small business owners need to understand that collections is a part of the game that needs to be done right, in order to both make sure you get what you are entitled to AND also making sure you manage the problem in a way that benefits your company in the long run. Listen out to the episode these tips where taken from here.