Running a business comes with its share of challenges, and one of the biggest headaches is dealing with a client who refuses to pay.
Running a trade business comes with its fair share of challenges, and one of the biggest headaches is dealing with a client who refuses to pay. Whether you're a plumber, electrician, builder, or any other tradie, chasing payments is the last thing you want to be doing after a hard day’s work. Unfortunately, it happens. So, what can you do to protect yourself and your business?
Let’s walk through your options, from prevention to resolution, so you can keep your cash flow steady and your stress levels low.
The best way to deal with non-paying clients is to avoid them in the first place. Here’s how you can safeguard yourself:
Always provide a written quote and, for bigger jobs, a contract. Outline the scope of work, materials, timeline, and most importantly, payment terms. Be crystal clear about deposits, progress payments, and when the final payment is due.
Even if it’s just a text message or an email confirmation, having written agreements prevents disputes later. If a client tries to backtrack, you’ve got proof of what was agreed upon.
For larger projects, request a deposit before starting work. It not only secures commitment from the client but also helps cover initial costs.
If you’re finding work through our platform, ServiceSeeking.com.au, you can access verified clients with a track record of hiring and paying tradies. This means you’re less likely to run into dodgy customers.
Despite taking precautions, you might still encounter a client who won’t pay up. Here’s what to do next.
Sometimes, it’s an honest mistake. The client might have forgotten or had a cash flow issue. Start with a polite reminder via text or email:
"Hi [Client's Name], just checking in regarding the outstanding payment of [$X] for [job description]. Let me know if you need the invoice resent. Thanks!"
If a gentle nudge doesn’t work, send a more formal invoice reminder. Attach the invoice and state the due date, along with a reminder of the payment terms they agreed to.
Emails and messages can be ignored, but a quick call can resolve things faster. Be calm and professional but firm, and ask when they plan to settle the bill. Sometimes, speaking directly encourages them to pay up.
If the client is genuinely struggling, offering a payment plan can be a win-win. You’ll still get paid, just over a longer period.
If the client continues to avoid payment, you may need to take stronger action.
A formal demand letter outlining the outstanding amount and the consequences of non-payment (such as legal action) can be enough to prompt payment.
Engaging a debt collection agency is another option. They take a percentage of the recovered amount, but it’s better than writing off the debt.
For larger sums, you may need to go through small claims court. It’s not ideal, but it is sometimes necessary to recover what you’re owed.
Chasing payments is frustrating, but every experience is a learning opportunity. Strengthen your payment terms, vet your clients, and streamline your invoicing to prevent future issues.
One of the best ways to ensure you work with reliable, paying customers is by using ServiceSeeking.com.au. Our platform connects you with serious clients who need skilled tradies and are ready to pay for quality work. Plus, by securing more jobs, you’re less reliant on a single payment, keeping your business financially stable.
Non-paying clients are a tradie's worst nightmare, but with the right approach, you can prevent, manage, and recover outstanding payments.
The key is staying professional and keeping your integrity. Set clear terms, communicate professionally, and, if needed, escalate the matter appropriately.
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