Sometimes, getting customers to pay is a real struggle. We've written before about getting rid of your bad customers, and why it's important to end those bad relationships early. But what about customers who haven't paid their bills, but you're not sure why? Let's dig into some tips and thoughts on dealing with customers who don't pay (without going full mobster on them).

Know the details

When you think a customer is trying to bail on paying, it's too easy to get emotional and jump to conclusions. Don't do it!

The first step to handling past-due customers is in handling yourself.

Pull up their invoice and make sure it's correct—verify the due by date is what you think it is, and make sure you actually sent it to your customer. You wouldn't believe how many times we've seen a business owner upset about an unpaid invoice, only to later discover they had the due dates wrong, or hadn't even sent it off! WorkWeek makes it easy to see unpaid and past-due invoices to help prove it's been sent. We'll even show you if the customer saw it.

The worst thing you could do with a customer would be to contact them while you're angry, accuse them of not paying, and then learn the due date hasn't passed, they have questions about the invoice, or you never sent the invoice in the first place.

Don't ever contact a customer when you're angry. You will only hurt your reputation and make it more difficult to get paid.

Staying in contact is key

Staying in contact with the customer during the invoicing process is an important part of keeping payments on track. Now, you don't want to check up on them every day or week if the invoice hasn't even come due yet. However, depending on your invoicing terms, when you notice it's past due, it's time to reach out.

We recommend making first contact on an unpaid invoice the day after it is officially due to be paid.

Once an invoice is past-due, it's time to call, text, or email your customer. Always start by politely confirming if they received your invoice, and ask if they had any questions or concerns about any of the items on the invoice that were the reason for not seeing the payment by the due date.

Here's a quick example of how a plumber might word an email or text to a customer named Mark:

Hey Mark, Hope you're well and enjoying the results of our work. I wanted to reach out and check in on the work to make sure you haven't had any problems or questions. I sent your invoice out last Tuesday (the 8th of April), but haven't received your payment yet. I'd be happy to resend it if it was lost or didn't find you. Let me know if I need to get you a new copy, otherwise, I look forward to receiving your payment this week.

Sometimes it can be difficult to keep up with all your invoice due dates when you're really busy. If you struggle with this, WorkWeek can help—we automatically email your customers on a schedule to remind them it's time to pay your invoices. This keeps the invoice fresh in your clients' minds without sounding threatening or overly aggressive. In short, it takes the awkwardness out you having to be your own billing department.

Be understanding—to a point

Depending on your industry, you might end up doing a lot of your work for customers when they didn't even expect to need the work done. Plumbers, tree service workers, and landscapers all come to mind. People never plan or choose the time they experience a pipe burst, have a tree blown down, or lose a retaining wall. Those are unexpected and unfortunate events for a customer, and though it is their responsibility to pay you—and to be upfront with you about their ability to pay—it's not always that easy for your customers to pay for such unexpected events.

Understanding and giving a little can go a long way. Always assess and understand your customer's situation when determining how to get paid. Try to treat them like you'd want to be treated if you were in their shoes—they're going to remember it.

You can probably spot a customer who might be struggling by the way they respond to an initial estimate. If you noticed this when you started the work, and they haven't paid by the due date, why not try offering them the option to split the invoice up into 2 or 3 payments? Not only will this make paying a bit easier on your customer, but it can increase the chances you actually get paid while keeping a happy customer. It's better to get the money in installments than get nothing at all. It can also help avoid costly legal action.

Still can't get them to pay?

So, the unfortunate truth of running a small service business is this:

When your customers don't pay their bills, it gets more expensive to make them pay their bills the further you escalate the situation.

You've still got a few options, but we're heading into territory where you'll have to decide if the invoice total is worth the headache and money you'll spend getting a customer to pay. If it's a small invoice, it can be more advantageous to write it off. For large invoices on large jobs, however, there are a couple legal remedies available to your business.

Late fees

Late fees are a tactic you can—and maybe should—employ from the start. Basically, late fees make it clear to your customers that paying late has a monetary consequence. Depending on how you set your fee and the size of the job, it could be a sizable penalty–2-5% isn't uncommon for service business late fees. If you don't like the percentage option, you can just add a flat late fee of, say, $50 whenever an invoice isn't paid by the due date. All that matters is that customers understand you expect to be paid by a certain day, or there will be additional fees to pay.

Again, understanding goes a long way here. You're fighting an uphill battle if you're trying to charge a late fee for someone that couldn't pay to begin with. A late fee is there to help you, not hurt your customers. Sometimes, a good customer you've been doing work for just gets busy in their life and forgets to send off a payment. This is a good time to let them know you'll wave your standard late fee if they'll close out the invoice as soon as possible.

Contact a lawyer

If you've made a few reasonable attempts to work with your cusotmer to get paid—whether in full or in installments—on a large enough invoice, it's time to contact a lawyer. Lawyers are great at writing very professional and somewhat scary-looking letters that threaten legal action if your customer doesn't pay. This typically works well with customers who don't want legal trouble and aren't truly trying to get out of paying—assuming the customer can actually pay. Of course, it'll cost you to pay for the legal time. However, if you're trying to get an invoice that's worth several to tens of thousands, trust us that spending a few hundred dollars to get a lawyer to make a call or draft a letter is totally worth it.

Hand it to a collection agency

The other option you have is handing the invoice off to a collection agency. Now, dealing with collection agencies is often messy, wastes time, puts a customer in a position to bad-mouth you, and very often doesn't actually work very well. You're also going to lose some portion of that invoice to the collection agency. Typically collection agencies fees are broken down into two categories:

  • Percentage: The agency takes a percentage of the collected debt. Collected is not the total debt. It's only what they collect from your customer. For example, if the agency fee is 35%, the customer owed $1000, but they only collected $600, they'd get $210 and you'd get $390 back.
  • Buy the debt: The agency agrees to buy a portion of the debt from you. You'll likely get a very small amount of the total owed invoice, but you'll get that small amount now vs waiting forever to see if they ever collect it.

When dealing with collection agencies, you're basically paying someone to try to do what you already couldn't do. It might work, it might not. If it does, you'll at least get something out of the invoice. So it could be worth reaching out to the customer one final time and offering to slice their invoice in half or knock off 20% or something just to save yourself the hassle and keep as much money in your pocket as you can.

The best offense is a good defense

Customers who don't pay can really eat away at your business's bottom line and your mind. Chasing unpaid invoices forever can wear you out and cause you to lose focus on getting work done, finding new jobs, and whatever it takes to keep growing your business. This is why it's so important to weed out bad customers, and keep finding the good ones.

One of the best ways to avoid such headache customers is to learn how to read customers. Unfortunately, that just comes with experience dealing with people and getting jobs done in your specific industry. When you gain that skill and a bit of intuition, don't be afraid to walk away from a job if you don't feel right about the customer. It's better to pass up a job now—assuming you can afford it—if you feel like you're going to have a hard time getting paid.

We hope these tips have helped. If you've got any ideas of your own—that don't involve baseball bats and kneecaps—let us know at