How to deal with non-payers

This year, dealing with non-payers is more important than ever. Every second that someone who owes you money delays payment, it has major implications on you and your business. I've seen many a small business go under because they haven't been tough enough with non-payers.

Being tough is definitely a mind-set. If you make it clear to your clients that you expect payment, they'll toe the line 90% of the time. But if you're pretty laid-back about payment and your clients recognise this, they'll definitely mess you about.

Here's my policy on payment: if we do work for a client, we expect payment.

That's it. Full stop. If there's a problem with the work, we're happy to have a chat and fix it of course, but we do expect payment for work done.

I don't think I'm being unreasonable. We're not a charity and anyone who doesn't pay, as far as I'm concerned, isn't holding up their side of the bargin.

I make this policy very clear up-front and very few people have a problem with it.

On the rare occasion where payment is overdue, here's how I deal with it:

1) Polite, gentle reminder about payment - which sorts 95% out
2) Tougher letter/email reminding them about payment - which sorts another 4% out
3) Small claims court letter - this is where I send them a stern letter with a fill-in small claims court letter attached telling them if they don't pay, the small claims form will be sent
4) Small claims court letter sent to court

In 6 years of doing business, we've only had one serious non-payer which was resolved in the small claims court. Most people are sorted out by the above steps.

So, get tough. Don't put up with non-payment. If you do a job, expect to get paid for it and go to the ends of the earth and back if you don't.