How to Get Your Client to Pony Up and Pay

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Sometimes, no matter how many times you remind a client to pay you, they still don’t send the money. Your client might give all sorts of excuses, or worse, they stop replying to you at all.

 Whether it’s $5,000 or $500,000, it’s still worth taking the time to get the money you deserve, and you may not even need to hire a lawyer or collections agent. Based on personal experience, here are some things you can do on your own. *

Three Escalations to Collect a Past-Due Payment

Step 1: Send the FIRST NOTICE

Suggested text:

Subject: Payment for my work is way past due
Importance: High

Hi Susan,

It’s been over 60 days since I submitted my invoice on <insert date>.  Per the terms of our contract, I should have been paid within 30 days. When can I expect the payment? Is there someone in Accounts Payable I should contact directly? I’d hate to have to escalate this any further.

-- Liz

PS: Invoice attached again here for easy reference.

Send this email with delivery confirmation and requesting read receipt so you know the client has seen it.

Step 2: Send a DEMAND LETTER

When you suspect that your payment still hasn’t been sent, the next step is to send a demand letter. This is the best way to officially escalate a late payment before you start legal action. Demand letters aren’t difficult; they just take time.

Your demand letter should include a brief summary of the situation, including:

  • What work you agreed to do and over what time frame including dates

  • The terms of your arrangement including pay rate and payment terms

  • When the work was completed

  • When you first billed for the work and  the number of days payment is overdue.

This article has some sample text to get you started.

Make sure to provide evidence for everything you claim in your demand letter. Attach your contract if you have one, or you can include PDF copies of the original emails that outline the terms of your engagement.  Also include a deadline: “Should payment not be received by <insert date>, I intend to pursue legal action for collection.” Also provide your phone number in case they need to verify your bank information.

Once you’ve drafted the letter, have an attorney co-sign it. Any attorney can sign a demand letter—it doesn’t need to be a contracts attorney or employment lawyer. Your cousin the divorce lawyer can do it, and so can a first-year associate. The point is to show your client that you’re serious about getting paid.

Once you’re finished, send your demand letter and documentation via email with delivery confirmation and a to-the-point message:

Subject: Collection letter attached; payment needed by July 26, 2024
Importance: High

Susan,

The invoice for my work on [project name] is now 60 days past due. Attached is a collection demand letter cosigned by my attorney. Please remit payment by next Friday, July 26, so we can avoid legal action.

Sincerely,

-- Liz Steblay

Most of the time, a formal demand letter will do the trick and get the money flowing. If it doesn’t, go on to step three.

Step 3: Send drafted LAWSUIT DOCUMENTS

This third level of escalation is almost certain to trigger action. This was how I finally got paid years ago when I was in this situation.

To make my demand for payment a legitimate threat, I sent a PDF of my unsigned lawsuit to my client via email (with delivery confirmation and return receipts turned on, of course). I said if payment wasn’t received within two weeks, I was going to file the paperwork. Oh, and the most important part: I also sent a copy to the company’s general counsel.

Subject: Final request for payment; summons and complaint
Importance: High

To:  Susan <the client>

cc:  <the client company’s general counsel>

Susan,

The attached invoice is over 120 days past due, despite your repeated emails that you “are working on it.” If I do not receive payment by July 31—two weeks from today—I will proceed with filing the attached lawsuit on August 1. 

If your Accounts Payable department has questions about remitting payment, they can reach me at this email or the phone number below.

Sincerely,

-- Liz

cc: John Doe, General Counsel of <company name>

In my case, the money showed up in my bank account ten days later.

How You Can Do This Without Hiring an Attorney

First, figure out which forms you should use for the lawsuit paperwork. This usually depends on which court you’ll use if you don’t receive payment— small claims court or regular court.

Each state has a dollar limit for their small claims court. (See a list of state court limits here. Tennessee and Delaware have the highest limit at $25,000.) Even if you’re over the limit but are willing to accept the limit as the max you’ll recover, you may still want to file in small claims court because it’s faster, easier, and cheaper. For example, in California it costs $75 for small claims but $435 to file in superior court.

Next, download the appropriate forms for your state. For example, search on “lawsuit forms Arizona” or “form for legal summons Georgia.”

Fill out the forms (see my sample for basic help) but do not sign your lawsuit document until you are ready to file it. If your friend/relative that cosigned the demand letter is willing to help, use their name and contact information instead of your own to show your client that you’re working with a lawyer.

To reiterate, send a PDF of the unsigned forms to your client and copy the company’s general counsel. You can probably find that person’s name by doing a Google search or via LinkedIn, and you can use Hunter.io to guess at their email address. In my case, the email copy to the general counsel bounced back as undelivered, so I then sent a hard copy via FedEx to the company’s main office. (I simply printed out the email, highlighted his name, then attached it to the legal summons and complaint.)

If this third level of escalation still doesn’t get you paid, sign the paperwork and file the lawsuit! You can do this on your own as the plaintiff without an attorney, or ask your attorney-friend/relative to do it for you.

Key Takeaways from My Own Experience

Always have a written contract before you start the work, especially if it’s a new client. ·It doesn’t have to be fancy— a simple letter of agreement is sufficient as long as it states what work will be done, by when, and the price for your services. Ideally it will include the payment terms too.

Include an interest clause for late payment. Usually these are moot because you’re not going to go through the hassle if a payment is a few weeks late, but if you actually have to sue, you’re likely to get the interest. (There’s a box for this on the legal forms). In my case, if the contract had a standard interest clause of 1.5% per month, the client would have owed an extra $1,300.

Keep all your emails. I keep a separate inbox folder for each contract. This makes it easy to go back and find the emails where the client agreed to the start date, duration, and pay rate— the key information which will be sufficient if your contract doesn’t get fully signed by both parties.

Pay attention to your instincts. In my situation, I had a bad feeling when I had trouble getting the client to complete the contract in the first place. I should have taken a harder stance earlier. For me, this was the biggest lesson learned: be less trusting until the client has earned that trust, at least when it comes to contracting and payments.

I certainly hope you’ll never be in this situation, but now you know what to do if you are.

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* I am not a lawyer and I do not give legal advice. You may want to discuss the specifics of your situation with an attorney. To find one, I recommend www.UpCounsel.com.

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