Would you give a late-paying client one final warning before claiming?

[DreamyKoala]

I undertake freelance consultancy work and have a client who has not paid their invoice. It’s currently 25 days overdue.

Through my business insurance they have a portal which has enabled me to create a final notice which was sent 25th July advising I may instruct a solicitor or debt collection service if payment isn’t received in 7 days. I received a snotty text the same day saying “you’ll get your money I’ve been busy” but 7 days passed and still no payment. I’ve been in touch with my insurance legal advice line this week as I do have legal cover but unfortunately can’t make a claim as the debt owed is under £500 (it’s £300), they advise to therefore do a money claim online.

I have registered with the courts and the first thing when going through the system suggests the following

Try to resolve the dispute
Before you claim you should:

• talk to the person or organisation you want to claim against
• consider mediation

Talk to the person or organisation Try to resolve the dispute by:

• telling them why you intend to make a claim against them
• suggesting timetable with actions you want them to take
• explaining you'll make a claim against them if they don't follow your timetable

So my question is, would you contact the client a final time advising this in the next step following legal advice, giving them another chance to pay or just continue on with the claim?

what would you do?

I’d give them a call and hope that would quickly resolve it.

Have you sent a second invoice with a late payment charge and interest? I never have but did look it up once or twice this year.
www.gov.uk/late-commercial-payments-interest-debt-recovery

My accounts software sends regular reminders, I’ve chased via email and WhatsApp and then sent the last letter mentioned in my post via email, received a message via WhatsApp saying you’ll get your money to which I replied look forward to receiving payment and nothing since

I haven’t sent another adding any interest and not sure I will both adding interest as it will mean a higher fee to make a claim via the courts.

What has worked for me after all the normal reminders is:

1. send an email headed Popping in to see you tomorrow. With a brief message saying I am worried about the non payment of the invoice and I’ll pop in for a chat about it tomorrow. This resolved 75% of problems with same day payment (3 x businesses)

2. Actually then calling in with a physical printed out copy of the invoice in my hand. This resolved the outstanding 25% ( 1 business)

3. When they request further services I say great, my terms and conditions have changed, I will need payment in advance. If they don’t accept it great, I don’t need the stress of chasing people.

I hope that helps 😎

Thanks that’s useful to know that tactic works though this is a wrestling club and don’t fancy knocking on their door 🤣

25 days isn't that much IMHO. I realise as a small business owner it is a lot but if the client was on holiday for say 2 weeks (normal this time of year) then that would be half that time.
I think I would be trying one more time via WhatsApp or a phone call to secure payment myself rather than immediately heading to small claims. But i don't know the circumstances of this client and whether you believe this is deliberate or oversight

Seriously even better, they aren’t likely to get physical with a woman!

Also start adding interest for late payment to your invoice. That might wake him up a bit...

Out of interest, why would you think 25 days is “not that late” and find that acceptable?

Late is late - they haven’t been on holiday but if they had, and had responded to my emails to give an explanation or advise when they plan to pay I might be more empathetic. But it’s been radio silence… If I go on holiday I make sure my invoices are paid in advance or scheduled to be paid while I’m away.

The contract they signed says payment is due on receipt of an invoice though I do put a due date of 15 days on the invoices to give clients that additional time.

They paid the last invoice late and I had a gut feeling this would happen and should have asked for payment in advance before accepting more work but I didn’t and unfortunately I’m now dealing with this.

They’ve basically ghosted me until receiving a final notice to which I got a text saying “you’ll get your money”.

However I have sent them an email tonight to remind them I still haven’t received payment since the final notice was sent and that I’ve been advised to take the next step and make a claim but would prefer not to and have given them an additional 48 hours to make payment.

You have to follow fair procedure and be reasonable. 28 days is standard for overdue accounts before taking legal action - I’m not saying it’s the law as IANAL but it’s standard business practice. It’s clear you’re desperate for this money, can you get a food bank referral for the meantime? But this is business. Your circs are irrelevant to the situation with your client. If your electric company or a supplier started chasing you through the court for an unpaid bill after this short amount of time how would you feel?

What date was on the original invoice, and what were the payment terms?

It is a waste of time using accounting software to send reminders, they get ignored.

I’m not desperate for the money and don’t need a food bank referral but thanks for the offer 🤣

It will be 28 days if they haven’t paid after the weekend.

I just think it’s bloody rude to completely ignore all friendly messages and follow ups and my gut feeling is they aren’t going to pay anyway - the last invoice they had was paid late but they responded to the reminders with some sort of excuse and apology but I’ve have nothing this time - I should not have taken on the extra work after that but I gave them the benefit of doubt and as they had initially booked me for phased project I felt I should really continue with it. I should have asked for payment upfront for this next stage, but unfortunately I didn’t.

I don’t pay my bills late and I’m not an electricity supplier so that’s irrelevant however if I got a reminder that I hadn’t paid an invoice
i’d be mortified, apologetic and make the payment straight away

Honestly, what on earth are you on about - she is entitled to apply the terms of payment that she wishes to and entitled to have them stuck to - they will have known this before asking her to do the work (and especially since they were late last time so well aware). Your personal opinion on what is reasonable has nothing to do with the terms that have been legally applied and regardless, it is absolutely not on to pay late. We run a small business and it causes us serious cash flow issues if people pay late. It’s got nothing to do with me needing a food bank - I need it to run my business and pay my own bills.

OP - I would actually do what a PP has suggested and say you will pop on to collect on X date as a next step and if nothing then go the legal route,

Thank you for this!

The contract states payment on receipt but I put 15 days on the invoices to allow people time to receive and pay it.

The invoice was dated 4th July and was due 19th July. I’ve not relied solely on accounting software reminders

Gentle reminder was sent on 18th July via WhatsApp that it was due the following day.

Sent emails on 20th July then another on 22nd July then followed up with WhatsApp on 25th July (he seems to respond to WhatsApp over emails previously) - no response to any

I sent a letter via email advising possible action on 1st August to which I received a whatapp message on the same day saying that my money will be paid - have received nothing since and not chased other than the accounting reminders which I think are sent every few days but as you say are probably ignored

I’ve sent another email this evening giving another 48 hours to pay before taking further action and that I’ll be sticking to email correspondence from now on

I didn't say it was acceptable and I understand it's not your terms of business.
All I am saying is that many organisations offer longer time such as 30 day payment terms and many would not take to court after a relatively short delay. Yes absolutely your right to impose different terms but I was merely expressing my view that it has not been an overly long time.

I already commented to say add interests to your invoice but just wanted to say I completely understand why you are annoyed.

I freelance as well and yesterday I dumped a new client/gave notice on that freelance contract because my first invoice to her is now late and I will start sending reminders next week.

Late payers are complete nightmare when you are self-employed and I was not going to do any more work for that client and risk invoices piling up.

Don’t give them prior warning but do visit the premises in person with a physical copy of the invoice. When you go in say loudly to the 1st person you see ‘ hello who do I speak to about non payment for work I have done and where are they ?’
This let’s their customers know they are not paying you.
Speaking directly always works better than at arms length communication.

Businesses are entitled to use whatever payment terms they choose on their invoices, and although the majority of larger firms would use 30 days from the end of month following invoice date, chances are that whatever terms you use, bad payers will continue to pay late anyway and will not abide by the payment terms.

All accounting software packages allow you to set up each supplier individually with the payment terms applicable to that particular account, and the software can produce reports showing what is due for settlement, but when people just don't want to pay you, they will ignore whatever the due date is and pay up whenever they damn well please.

Make sure you add daily interest on too
and your extra time as costs for dealing with all this!!

Solicitor here.

One month is very soon to sue, I’d give it a little longer. My guess is they pay at end of August.

keep the WhatsApp it’s an admission.

use money claim online (it’s a .gov.uk site) if you do need to sue. It’s very simple.

It’s really easy to ignore emails and messages. What works best is a phone call- you may need to borrow a phone if they are likely to ignore your number. If they don’t pick up, leave a voicemail asking politely for a payment date and making it clear that you will be following up in 1 or 2 days. Then stick to this.

If you get to speak to someone ask them to specify a payment date. If they won’t then ask when is a good time to call back and get a date. If they don’t say, then make it clear you will follow up anyway with more calls.

You need to be persistent and polite. I’ve almost always had success - unless someone’s gone bust. If it’s local and you can call round, then definitely try this as well. Nobody really likes being chased for payment so most people will pay up - if they can - once they realise you are not going to go away or be ignored.

Good luck!