Lets say the client signs a contract with you before your begin their project. They receive you monthly invoices & your begin to receive their payments for your services, then they stop paying you all together. What recourse do you have to receive money that they owe you?

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Cora Belle Marburger
Your Ace Virtual Assistant

Cora Belle,

It does not appear that you asked for a deposit when the contract was signed.

If they are not paying you now, you cease work and send them an invoice detailing
your late payment/no payment policy.

I am not sure if you have a late/no payment policy but this would go into effect immediately as soon as the invoices are not paid.

In this particular case you would again, stop work and send a final invoice with any late payment penalties attached. I would continue to follow up to ask for payment. Unfortunately, you may need to take the loss and just call it a good lesson learned.

You could also call the client and ask to set up a payment plan so they can rectify their invoice. But I definitely wouldn't contract them any further.

In the meantime, update your payment policies to include a deposit and late payment penalty procedures.

You could pursue legal avenues but sometimes that costs more than the money owed.


Janine

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After a certain point in time, I would go to a collection agency, which I had to do.

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Richard Rinyai
www.virtualofficeguy.com

I would send a final invoice with late fees. If I get no response from that then I send a "collections" letter. I only lost out once and it was a small amount. Like Janine said sometimes it does not pay to pursue legally.

It is a great idea to get a deposit to hold onto in the event that this does happen. For all of my retainer clients they must pay by the first of the month to hold their spot for that month. For all my web and internet marketing clients I require 50% down and balance upon final approval.

I rarely work without a deposit unless it is a long term client who needs a quick one off.

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Lee Drozak

What a frustrating thing to have happen. Sorry. I spent a lot of time in small claims court mediating business disputes- it ain't pretty or cost-effective.

You have the most power when you negotiate directly as opposed to through the legal system. Start with talking to your client. This where it pays off to cultivate a warm relationship from the start.

I once worked with a dentist whose clients didn't pay for a year. When he finally sat down with them and asked, they responded that the husband had lost his job, which made finances tight and they were too embarrassed to say they needed a payment plan. Once he understood that things got fixed pretty fast without court intervention.

If you've tried talking, and I mean more than a couple of emails, it's time to get some help, a neutral third party who can get the conversation flowing and point out solutions you might miss. Just about every town has a local mediation non-profit that offers services. Call them up. It's very affordable and there's often a sliding scale. Can't find that, try inquiring if the local law school has a mediation program.

Last resort, go to small claims court. I don't recommend this at all unless the debt is in the thousands. For solopros, it's hard to justify the expenses, i.e. filling fees, at least 1+ days out of the office, possibly hiring a sheriff to enforce the judgement. If you have to go this route, try your local bar association to see if they have a reduced fee panel. These lawyers offer the first meeting at a discount. You can get a lot of questions answered, if you prepare well.

Best advice- be crystal clear about your money policies. Create a policy that covers all the aspects of payment. Even if you never use it, having it in writing and ready is a wonderful cushion to have. Better yet, start integrating whatever policy you design into your on-boarding conversation. This is the conversation that explains each part of your welcome packet and how you do your best work.

You can't blame clients for not being cooperative if you don't tell them what you expect. That's doubly true when it comes to the money part, where folks get stressed anyway. Hope that helps

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Dina Eisenberg, Client Whisperer
Got a client to figure out? Borrow my Brain.

Now I did have a client that I had to "remind" to pay me and I kept an eye out for anymore occurrences. Me personally, if I do not get paid I would reach out to the client and stop all work until I heard back from them on the status of their issue with non payment. I also read some really good advice on how to handle it more professionally and will definitely keep that in mind.

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LaToya Gay, VirtuallyNSync, LLC "A virtual staffing agency servicing stay at home moms, women and entrepreneurs"

I just posted on 6 Red Flag Clients to Watch For and I should have posted on this thread! I was checking out http://www.businessbeware.biz They seem legitimate. I can't find any negative info on them. When I register my business name and DBA I plan on joining and checking them out. ~ Lena

I haven´t experienced this one yet, and hopefully not ever. I once had a client who could not pay on time, and just told me about his circumstance and I just told him no problem and to pay when he could. But this client has been a long time client, so I know him well already.
I think you should set a deadline for payment, and when it´s not paid, you stop working. Talk to the client, and unless the amount is big, I don´t think there´s a need to go to court. Just consider it as a loss, and save your time, energy and money.

I've been putting together my policy on non-payments and one thing I am going to look into is this. I put my son in day care when I was working outside the home and at one stage I had an outstanding debt of $19. They sent me a statement and attached was a generic letter on their lawyers letterhead that legal action would be taken in 14 days if not paid.

Well I didn't even know I owed them money, but my point is that I am going to ask my lawyer if the idea of using a generic letter like this is feasible. It certainly got my attention.

Another good lesson here is make sure the client knows they owe you money and have received the invoice before threatening legal action because I was happy and able to pay and it just got my nose out of joint that they sent a threatening letter!

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Samantha Lea
Virtually Sam

Stop the work and send them a letter requesting payment and state you are ceasing work and that any work that you have, that has not yet been delivered, will be held until all invoices are paid. (Of course you will want to word it better than that

Personally, I would not pursue any legal action. I don't know that it would be worth it to go through all the trouble and time. Instead, it would be a lesson learned and from there on, I would require at least 50% payment prior to work starting.

If it's someone I know well I may waive the 50%, otherwise I require a 50% deposit and if they don't agree, I encourage them to find someone else.

It's unfortunate that there are people out there that take advantage of good, trusting people, like yourself.