What To Do When Paying Clients Ghost You
There’s a magical feeling when you’ve completed a project for a client, had fantastic feedback from them and you click on the send button for the invoice. You’re going to get paid for a job well done!
The payment due date has been and gone but that’s ok, right? We all forget things from time to time and the client was so happy with your work it must be an oversight. You wait a bit longer and feel that churning feeling in the bottom of your stomach – something isn’t right here.
The payment reminders are ignored, your emails are ignored and those phone calls you summoned up the courage to make are also ignored. Your client has ghosted you and it looks like you’re not going to get paid for that hard work after all.
Unfortunately, it’s a common occurrence and something I think all of us have probably experienced at least once in our business. There are ways to ensure you do get what you’re owed for your work no matter how much your clients might try to ignore you, so here they are.
Have a solid contract in place
Getting paid correctly is all about ensuring your contract is accurate and legally enforceable. It needs to be clear on what you’re going to do, what they’re required to do (provide you with the information/resources you need to do your work), how much it’ll cost, what your payment terms are and what will happen if you don’t get paid.
If copyright is involved, i.e., you’re a graphic/web designer or similar then you need to clearly outline when copyright is passed over to the client (usually when full and final payment has been received in the UK).
The payment section needs to clearly define when you will send your invoices, what your payment terms are (immediate, 7 days, 14, 28, etc), VAT, how you will accept payment and the steps you will take to address late payment such as reminders, added interest, debt collection agencies/small claims court.
I highly advise you to use a contract template prepared by lawyers wherever possible to ensure that everything is as it should be.
Get your invoices right
A common excuse for an unpaid invoice is the wrong details, date, amount, etc so make sure that your invoicing is accurate.
Make sure the invoice aligns with the scope of work, that everything on there is accurate and that the payment due date is fair and clear.
Also, make it obvious how you want to be paid by stating it on the invoice – remember it’s your business and your right to decide how you want to be paid but do try to provide a couple of options where possible, bank transfer, standing order, debit/credit card via Stripe or PayPal for example. It’s not unusual for a client’s cheque to “go missing” so you are perfectly within your right to refuse that as a form of payment should you wish.
Do send reminders
Remember that real life can throw challenges our way and your client may have a genuine reason for not paying yet, ill health, family issues, etc can happen to any of us at any time.
So, do be understanding in the first instance, send a friendly reminder and ask if there’s anything you can do to help. Cashflow might be the issue here, your client may be waiting on one of their client’s paying them and are simply unable to pay the full sum before they do. If that’s the case, can you come up with a payment plan to break the amount down over a few months instead?
There does come a point when you’ve done everything right and you’re still getting ghosted, so what then?
Issue a 7-day payment request before action
This is one final request for payment that you should send with a copy of their signed contract/scope of work. Let them know that you will be filing a claim against them for the amount due if they are unable to make the payment within 7 days of this request.
Be firm but fair in this reminder. It’s not an action you want to take but you deserve to be paid for the work you did, so do be brave and take the action you need to here. If this feels too much, there are companies that will do this for you although they will take a commission from the debt recovered.
For a small amount, submit a Small Claims Court N1 form
For a sum less than £10,000, you can submit an N1 form to the small claims court online. The court will then look at and make a decision (and why it’s so important that your contract and invoicing was accurate). If they find in your favour, your client will be liable for the invoice amount plus the additional interest and court costs.
For a larger sum, a statutory payment demand should be served with a 21-day payment period before you can petition the court to hear your case.
Get a debt collection agency involved
Once the court has decided in your favour, your client may still avoid paying you. In that case, get a debt collection agency to collect the debt for you. Not all of them use heavy-handed tactics and there are several that do specialise in working with small businesses in cases like this, so ask around in your local networking groups, etc to find a company you feel aligned with.
Hopefully, you won’t have to deal with ghosting clients in your business but if you do, I hope the information in this blog is helpful to you. I’m not a legal expert so would always advise you to do your own research but I hope the points I’ve made here are a good starting point for you.