What To Do When Customers Just Won’t Cough Up The Dough

If you have some customers who refuse to pay on time, you are not alone. According to the National Federation of Independent Businesses, around 64% of small business owners have invoices that are more than 60 days outstanding.

One of the problems might be that you are not invoicing your customers correctly. So what can you do to improve the speed with which you are paid?

Follow Up

Many new entrepreneurs make the mistake of thinking that they have to be people pleasers. Often they will forgive late payments because they want to be friendly and professional. But customers can sometimes take advantage of entrepreneurs who don’t assert their right to be paid on time.

If you can, take it upon yourself to be firmer in your interaction with clients. If you find this sort of confrontation difficult, delegate the task to somebody in your team you can do it. It is important that payments are made on time, otherwise, you risk letting your customers walk all over you.

Improve Your Invoice System

Another reason businesses get into trouble is that they don’t have adequate invoicing systems. It turns out that cash flow management is critical to the success of any business, and so having a payment system that allows customers to pay quickly is essential. Sometimes, firms use accounts receivable financing in order to deal with the problem of late payments. These solutions pay all of the invoices that you are currently owed and then take the risk themselves of late payments.

Don’t Get Angry

Sometimes clients can get into financial difficulty themselves. It is worth asking, therefore, how valuable a particular client is to you and how likely they are to recover from their present financial difficulties. You need to know whether they can become a paying customer once again and if you can get all of the money that is owed to you.

One way to do this is to offer the client an installments plan. You will often find that a customer can’t pay a lump sum of $10,000, but they might be able to pay $500 a month over a period of 24 months. Offering clients a new method to pay puts you in a great negotiating position, especially if the new plan is different to your original contract. You can then pose as the helpful business who is helping their clients make the payments that they owe, without damaging your public relations.

You can also offer clients a partial payment plan if getting money faster is more valuable to you. Most businesses would accept $8,000 now rather than never receive the full $10,000 that they are owed.

Take Court Action

Going to court should be a last resort, but it may still be necessary if the customer refuses to pay. Speak with your lawyer to find out whether doing so it’s worth your while. Another option is to hire a collection agency to do the work of recovery for you. Just remember that collection agencies will take a cut for themselves to pay for their services.

This post may contain affiliate links.


  1. Interesting article. i like the idea of the installment plan but having to chase people for money is not a pleasant task…what happened to pay as you go i wonder? the whole country seems to be in debt these days.

    1. I agree 100%! I tell most entrepreneurs that I work with to create a system where customers only pay up front for the product or service. However, there are some industries/businesses that must rely on installment/credit payments from customers because if they don’t then they won’t be competitive in their industry.

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