client doesnt pay you

When Your Client Doesn’t Pay

Have you ever looked back at a situation and said “wow, I wish I knew what I know now, then”? We all make mistakes that are lessons learned, and hopefully don’t make that same mistake again.

Being an entrepreneur is not always easy. There are a lot of factors that can play a part in the success of your business. A lot of mistakes are common and easy to make, and could potentially sabotage your success. Some mistakes you just have to learn on your own, but luckily, some of them you can learn from other people. 

I want to tell you about a mistake that I made, so that you don’t end up making it too.

There was a client that came to me a while ago (we’ll name her Jose). She reached out in a panic and needed serious help with her business.  She decided to work with me in my six month coaching program. It quickly became apparent there were a lot of challenges happening in her business.

When she thought she needed help with marketing, I discovered what she really needed was strategy, systems and a good team. Her business was floundering and was not operating at the capacity it could be.

After our strategy session and a couple of coaching calls, I realized she was behind on her payment plan and I was ahead on the amount of time she should have received for what she paid.

I reached out to her and suggested we pause her scheduled sessions until she was able to get caught up. She was receptive and agreeable and gave me all kinds of reasons why she was behind and made promises unkept with respect to payment.

Here is where things started to get a little bit concerning. As time dragged on, her social media profiles showed that money wasn’t an issue. She was taking trips to California to attend events, getting certification in someone else’s program, and took another trip to the east coast.  It ate away at me.

There was a high degree of resentment and even anger building in me. I felt greatly disrespected and wanted to “stand my ground” and fight for that money.  

I confronted her on this, and there were a number of heated emails exchanged. The more I pressed her about what she owed me, the nastier she became towards me.

Suddenly it was all my fault. Although the relationship had been great when she was getting advice for free, she now felt I had advised her poorly. Jose was using every tool she could to delay and try to get out of paying me.

Eventually, I had to give up and let the money go.

This was a lesson that I needed to learn and she was my teacher.

What YOU can learn from this situation:

1. Always invoice the amount you need before you start a project so that you are covered. 

If that’s a coaching agreement, always ensure you’re paid for enough time in advance that you don’t get caught working for free. For web designers, invoice half in advance. Then invoice the remainder at completion, before you upload the website to your client’s server.  If you are a wholesaler/retailer, request payment in advance of ordering any items for the client.

2. Have your payment terms documented.  

It’s not enough to just invoice in advance, you should have your payment terms, including interested clearly outlined and be able to explain them to a client.  Explain the terms as part of the process.

3. Have a follow up process for outstanding invoices so you know ahead of time when someone has not paid their bill.  

If following up and asking for money makes you uncomfortable, hire someone whose job it is to call and follow up on payment.  

4. Don’t over extend your cash-flow situation because you really want the business.  

This is a big one.  Some people want the business so bad they bend their own rules only to find out that the customer never pays on time.  If you are working with a larger organization that pays within 60-90 days, that can have a significant effect on your cash-flow situation.  You need to be aware of that and manage it accordingly.  If their payment terms don’t work for you, don’t take the business.  

5. Don’t buy into excuses, and give some people the benefit of the doubt.  

That sounds like a huge contradiction but the truth is sometimes good people fall into hard times. If you talk with them and work with them, they will follow through and remain loyal clients who do business with you for years to come. 

As for Jose, she never paid.  The petty and angry part of me unfriended her on every social channel so I wouldn’t have to see her and get annoyed by her life experiences. The mature part of me moved on and put the lessons learned to use in my business.

The world does not revolve around #money, but your #business relies on it. Share on X

Luckily, I know numbers, and I understand cash flow and money. Losing that money from Jose wasn’t breaking my business because I always have a plan for when something comes up. But in a lot of cases, a loss like that could be really destructive.

Do you need help understanding money and cash-flow? I would love to see you come visit me in Ottawa at my Money Mindset and Marketing event.  I want to help you understand those pesky numbers, and dig deep into your business and apply that learning.

Leave me a comment and tell me how you ensure that your client relationship is trustworthy, and how you make sure you get paid. 


8 thoughts on “When Your Client Doesn’t Pay”

  1. After being short changed by a client, I now bill in advance. Client pays, then we work together. A lesson learned the hard way.

  2. Great post this morning! I have a similar client that I’ve been wanting to break up with. When I give her “free” advice I’m the best person in her life. When I tell her she needs to pay for a session, she gets mean, tries not to pay, but waits a few months and tries to get more from me. Thank you for this lesson Lisa.

  3. I had a client that terminate a contract because he was not happy with the results of a different project, with a different contract. I sent him an invoice for my termination fees and he refused to pay the fees. During a subsequent phone call where we were discussing the fees, he told me that he had found a paper (that I must have dropped at a meeting) which was basically a journalling exercise, which he read, and then used the information in it against me during our conversation!! I was so embarrassed that I agreed to drop the fees, even though I knew that he was using an incredibly low tactic to get me to back down. If I had found something that belonged to someone else that was evidently personal, I would have immediately given it back to them, or ripped it up and thrown it out and forgot I ever saw it. Ironically, he questioned my integrity while at the same time, showed a complete lack of integrity towards me. I considered taking him to small claims, butI looked for my copy of the signed contract but could not find it. I am not sure if I have enough evidence to prove that we had agreed and the contract had commenced. I learned a few very valuable lessons from this, including :: always trust your gut (I had a feeling he was going to be a difficult client right from the get-go), always make sure your contracts are signed, and once they are, file the original somewhere that you will always be able to find it!

  4. I would not say it’s petty to remove them from your social media channels in terms of connections. I went through similar experiences and decided it made perfect sense to remove them. If any of my connections on Linkedin or otherwise found them OR they reached out to any of my connections, they would assume I had no problem with them as of yet. That did not sit well with me. If I’m no longer comfortable having them as clients or referring them, I should not be connected to them at all.

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Lisa Larter Bio Image of Lisa x400

Lisa Larter

Founder and CEO of the Lisa Larter Group, master strategist, author, speaker, podcast host, social media expert, consultant, and business coach. Lisa inspires entrepreneurs and business owners to see the possibilities for their organizations when it comes to strategy. She uncomplicates modern marketing and creates (and implements) strategies for businesses that are guaranteed to increase visibility, inbound leads, and revenue.

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