When a customer doesn’t pay an invoice on time, your first response should be to reach out to them. Try to find out why they have delayed payment. Find out if there is anything that you can do to help to get the invoice paid.
Be persistent with the late-paying customer. You can call them, send them emails, reach out to other people in the company, or visit their offices if they are nearby. Don’t be aggressive, but don’t stop asking.
You can charge late fees. Set up a system that’s supported by terms of service or policy. For instance, you can send a warning to clients who fail to pay within five days.
If the customer doesn’t pay on time because of cash flow issues, you can propose a payment plan where they pay for the balance in installments. As part of the payment plan, you can negotiate with the client the amount they can comfortably pay within an agreed-upon period.
You can stop working for the client until they pay. Inform the client that you’ve halted work on the project until they pay. If you continue working with that client, consider asking for a down payment before you start a project or charge them upfront.
Consider factoring in the invoice. Factoring means selling the invoice to another company. You won’t get the full amount but it’s a good option if you need some cash fast.
If you realize the client doesn’t want to pay, you may consider legal action. Have a solicitor send the client a letter urging them to pay or face a court case. In some instances, the threat of legal action motivates a customer to pay.
Alternatively, you can file the matter in a small claims court.