The Disappearing Act: What To Do When a Client Stops Paying

Posted by Ryan Howard on Mar 3, 2017 11:41:43 AM

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In 2012, the hashtag #GetPaidNotPlayed was trending on Twitter. The tweets were shared horror stories by contractors and small business owners who were stiffed on their invoices. In total, the amounts not paid by those adding to the hashtag totaled up to nearly $16million. The saddest part of the story is that many of these invoices would remain unpaid because businesses want to continue doing business, not deal with the frustration of chasing down a non-paying client.

What options do business owners have when a client stops paying or disappears?

Why do clients stop paying?

There are numerous reasons clients may have for not paying their invoices. The first is obvious in the opening paragraph - they get away with it. If a client feels that the business is not experienced in or will not pursue legal action or collections, they may not prioritize payment to that business. Of course there are other, more legitimate reasons for non-payment, including various red flags that signal the business isn't capable of paying.

Research on the client prior to doing business, communication with a few inside the organization, and signed written contracts will help to ensure a positive relationship and payments made on time.  If not, you still have alternatives to recover payments.

Is follow-up okay?

Following up is not only okay, but necessary. Asking for money can seem awkward but if there is a signed contract and your business has fulfilled its obligations, you do have a right to ask for it. Contact with your client can be friendly but stern, with a phone call or resent invoice and note, and the fact that there's follow-up at all may prompt payment. 

The client may not be paying because they never saw, misplaced or are awaiting approval of the invoice. They may have questions about your work or a dispute about the amount due. Clearing up these miscues may be all that is required to get paid.

Download B2B Collections Best Practices

Are there ways to avoid non-paid invoices?

Consider business relationships the way you'd consider personal relationships. Before marrying, moving in with, or even going on a road trip with someone, there has to be a base level of trust and a clear communication regarding responsibilities and expectations. Anytime there is a contract, written or otherwise, with someone, these things must be spelled out for the protection of all involved. Some options to consider to avoid non-paid invoices are:

  • Written Contract - This contract should detail the description of what is expected in terms of work, payment schedule and what is due. Stick with one or very few standard contracts to use for your clients to minimize special requests and know what's expected.
  • Standard Payment Terms - Your contract can be reviewed by a lawyer to make sure your business is offering fair and reasonable payment terms and consequences for non-payment. Another option, especially with project work, is to ask for partial payment up front and the rest due upon completion.
  • Regular billing and review of outstanding accounts - Clients will grow to expect your invoices at regular intervals so they can plan for them. If any accounts are past due, follow-up as soon as possible. 
  • Regular contact - Communication and relationships with your client's accounts payable department could also keep your invoices front of mind. At the very least, you'll have a resource to contact when or if payment becomes past-due.

Standardizing your billing practices will create processes that help you to stay on top of your accounts receivable. Sporadic invoicing and agreements can cause confusion and sporadic unpaid accounts as well.

They're not going to pay. What now?

If the client has completely ghosted you, or is refusing to pay the invoice, there are still options to recover some, if not all, of the amount due. Actually, the earlier the account can be sent to a collections agency, the more likely the invoice can be collected.  A collections agency may also offer the ability to discover the root cause of the non-payment, help negotiate better payment terms, recover the invoice and still keep the business relationship intact. If it's early in the collections process, the agency may be able to negotiate as a representative of your company, and retain the trust established between both parties. 


Unpaid invoices do not have to remain unpaid. Commercial collections agencies collect on behalf of business to business clients and understand that a single invoice can be a big deal. You don't have to feel #PlayedInsteadofPaid if you know what options are available to you.

Topics: Best Practices, Business relationships