I was talking with my new neighbor over the summer about cutting the grass since he saw me out there cutting the grass with my brand new battery powered mower. He shared this with me.
“If you are looking for a landscaper, I’d be happy to give you my guys’ number. He’s a bit expensive, but I haven’t paid him in 14 months and he’s still showing up every week.”
Now whether that’s the fault of my neighbor or the landscaper, in the end, the landscaper is sending the wrong message here.
Before it gets to 14 months, let’s see if we can nip this in the bud as quickly as possible, shall we?
Benefit of the doubt
This is obvious for some, yet not so much for others. When a client is late once it’s often not malicious or with bad intentions. It’s often more like they saw the notification and it slipped their minds.
Or if you are taking recurring payments through a credit card and the card fails, it’s often due to the card being expired.
The point I’m trying to convey is that you want to remove your emotion from the equation when it happens for the first time. Come at it with the perspective that it is likely a mistake and can easily be remedied with a simple email asking them for the payment.
What to do when a late payment is more than a mistake
If the same client happens to do it again or more than usual, then a more in-depth conversation needs to happen.
The mistake was that he continued to do the work, thinking that he would get paid eventually.
He shared a great point on the show when he said, “what I was saying to my client was that it’s ok to not pay me because the work gets done anyway.”
“What I was saying to my client was that it’s ok to not pay me because the work gets done anyway.”
You want to have your clients respect the payment structure of your business and the contract of the project.
If they miss a payment, work stops. End of story.
Simply tell your client either in a phone conversation or email that since payment has not been received, the work will be suspended.
Also in that conversation, you want to share the consequences of this. Could mean a missed launch date, marketing plans, or something else.
If time continues to pass without resolution, say for a couple of weeks, the conversation should transition from a payment conversation to an end of project conversation.
Explain what that would look like and how if/when the project became a priority again how they could ramp the project back up with you.
Over the decade of being in business myself, I’ve never had it go this far, but have heard of cases where this happens so you’ll want to cover your bases.
A client relationship is two-sided. You agreed to provide a service in exchange for being compensated. Don’t let time slip away on being compensated because that is sending your client the wrong message.
Here are some further resources that you'll want to check out that directly relate to the show.
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