What To Do When Your Clients Don't Pay


If you run a small accounting business, you may from time-to-time encounter clients who don't pay their invoices to you on time.  This can impact your cash-flow and cause serious problems for small practices.  Here's how to deal with late payers.

Immediate court action?

You should begin by contacting the debtor by telephone and by letter.  It's important to keep the channels of communication open at this point, as you need to find out why the client can't or won't pay.  If it's just a case that the client has cash-flow problems, you may be able to arrange a repayment schedule, whilst remaining on good terms.

If your phone calls and letters have been ignored, it may be tempting to rush straight to the small claims court in order to recover your money.  However, instant court action to recover your debts should be regarded as a last resort. 

A more effective method of recovering what you are owed is to use the services of a commercial debt collection agency.

Debt collection agency

The debt collection agency will be able to apply pressure to your non-paying clients in a number of different ways, including:

  • telephone calls
  • emails
  • letters
  • face-to-face visits to the debtor

Unless the client is a particularly stubborn payer, a combination of the above is generally sufficient to procure what you're owed.  You can also instruct the debt recovery company that you are amenable to the debtor making an 'arrangement to pay', which will eventually clear the debt in full.

Although this sounds as though all these actions will add up to a hefty bill, most debt recovery agencies work on a no collection, no fee basis.  This means that you won't pay anything unless they successfully recover the debt for you.

In the case of really resistant clients, the debt recovery company may recommend either writing off the debt or pursuing the debtor through the courts.  Before embarking on such action, you should consider whether or not the debt is likely to be defended.  If the debtor challenges your action, you could be faced with hefty defence costs if you lose, and if the debt is not huge, it may be best to write it off.

In conclusion

If you run a small accounting business and have problems with some of your clients being tardy with their payments or refusing to pay at all, you may be well-advised to call on the services of a debt collection agency to get your money back.


7 November 2016

Starting again after a divorce

I recently got divorced, and not only did I lose my wife, but I also lost most of the possessions I'd accumulated over the last 3 decades. I needed to take out a personal loan just to buy a new bed because I walked out with nothing but my self respect. It's not easy to start with nothing, but I earn a decent wage and I'll be able to build it all back as long as I am smart about how I structure the loans and financing of my new life. This blog is all about taking out loans to fund a divorce and new, post-divorce life.