5 Important Steps to Take When a Customer Won’t Pay for Services

by | Jun 6, 2023 | Tips and Tricks

5 Hilarious Steps to Nudge Customers Who Won’t Pay for Services

Aha! Being a home service entrepreneur, you fully depend on your charming clients to keep the dough rolling in, am I right? But what do you do when your customer leaves you hanging, unable to pay up after you dazzled them with your outstanding service? Fret not, my friend, for I present to you five ingenious steps to swooping in like Mary Poppins when your clients won’t show you the money.

1. Dial up those MIA clients

Grab your trusty phone and reach out to your cash-strapped client. Hold on, no need for mobster tactics just yet!

There could be dozens of innocent reasons for their tardiness, like:

  • Their dog ate the invoice
  • A zombie apocalypse broke out in their uncle’s backyard
  • They got so excited about the work you did that they just HAD to leave for that worldwide cruise
  • They used your invoice as an origami boat while pondering the meaning of life

Give those lovely clients a friendly nudge, and if they’re in a bind or being paid in Lego bricks, cut them some slack, offer a payment plan, and bring tears of joy to their eyes.

2. Hit that resend button

Once you notice you’re standing empty-handed, resend your invoice with the speed of a caffeinated roadrunner. Postal pigeons and doorsteps covered in invoices are ancient history! It’s 2021, folks – level up to digital invoicing and wave goodbye to the ‘Spam folder’ scams.

Sending invoice to customer that won't pay

If you’re lucky, your client will see the light and happily pay up or at least start chatting about when they can cough up the cash.

Pro tip: Equip yourself with home service business software that helps you keep tabs on your invoice status – no more surprises, just sweet, sweet payments (hopefully).

3. Embrace the joy of structured payment reminders

Alright, my friends, let’s face it – sometimes it’s tough to find the right words to say, especially when you’re ready to pull your hair out and have no clue what to do. Instead of just flapping your wings and sending messages you might later wish got lost in the mail, I present to you the fantastic world of payment reminder templates! Voilà!

So, here are four spiffy little gems you can save and use for those times when a customer seems to have a case of amnesia about their invoice.

Oh, and by the way, it’s always a good idea to keep copies of all communication you have with a client before, during, and after a job—just in case you need them for your own little trip down memory lane later on.

4. Time to call in the cavalry: legal action!

Now, if you’ve done your absolute best to get in touch, resent those pesky invoices, and sent out reminders like there’s no tomorrow, but that stubborn customer still won’t open their wallet, then it may be time to roll up your sleeves and pursue some legal action. Dun, dun, DUN!

1. First up, you can hire one of those fancy-schmancy attorneys to work their legal magic on the client for you.

2. They’ll send a letter shaking their authoritative finger and demand immediate payment, along with copies of the initial contract and invoices as proof of your lovely little agreement.

3. And, if push comes to shove, they can even help you with putting a lien or a lawsuit on that non-paying client.

4. If that doesn’t work, there’s always small claims court, where you can plead your case (with or without a lawyer) and hope the judge sympathizes.

5. Just keep in mind there’s usually a minimum amount you need to sue for (like $2000), so if you’re just trying to collect a measly $500, you might be out of luck.

6. But remember, legal action can be costly! Save it for the big jobs and invoices – otherwise, you might just end up pouring more money into chasing payment than what the job was worth in the first place.

5. Call in the big guns: collection agencies

Alrighty then, if you’ve tried options 1 through 3 and decided legal action isn’t quite your cup of tea, but you’ve still got a customer with a debt that’s 90+ days overdue, it’s time to call in the collection agency cavalry!

These handy-dandy agencies charge you either with a percentage of the debt or a flat fee per account they collect on. They’re perfect for those of you feeling short on time, or just aren’t quite up to speed on all the rules and regulations around debt collection in your state. For example, you know, things like when and how you’re allowed to give those forgetful clients a friendly little ring.

Before you choose a collection agency, though, make sure you do your homework! Find one that:

  • Knows the ins and outs of collecting in your industry
  • Gets the thumbs-up from your colleagues or industry contacts
  • Is licensed and bonded in your state
  • Behaves professionally and follows all your state’s collection laws

    And there you have it! A guide to getting those payments with a dash of humor, courtesy of your friendly, hypothetical Robin Williams. Good luck!

How to dodge the dreaded non-paying clients

Ah, non-paying clients – the bane of our existence. Let’s rewind and figure out how to avoid these folks before they darken our doorsteps. Time to tackle the problem head on, with a little Robin Williams flair, shall we?

1. Easy peasy payment options

Hey! Let’s not make it a hassle for clients to give us their money! If you’re only accepting payments through cash or checks, it’s like you’re begging for overdue payments. Offer the easiness of online payment options, and watch your clients pay on time, every time.

2. Oh, those lovely deposits

A deposit won’t guarantee timely payments, but it sure will get your client invested – quite literally! If they’re reluctant to put down that deposit, chances are they’ll be a pain later on. Remember to check your state’s maximum deposit allowance, so you don’t accidentally become the bad guy.

3. Follow-ups and (friendly) reminders

Clients are human too; they might just be forgetful, not malicious. Gently nudge them with a follow-up or a reminder about that impending invoice. With Bizvalet’s invoicing software, you can automate personalized little nudges for every overdue invoice.

4. Contracts and quotes and invoices, oh my!

Nothing says you’re in a serious business relationship like a professional, legally-binding document. Cover all your bases with proper contracts, quotes, and invoices. Plus, in a worst-case scenario, they’ll come in handy if you need to prove your case in court.

So, to summarize, make it simple for clients to pay, ensure they have some skin in the game, keep them “in the know” with reminders and look like a pro with well-drafted paperwork. Et voilà! No more overdue payments!