So Your Client Hasn't Paid That Invoice
Here's what to do.
Let’s talk about the absolute worst thing about building a fractional business - late payments. It happens to the best of us, no matter how good that client relationship is or how organized you are with invoices and payment reminders.
(True story: I once had a client that was 60+ days past due on a payment of more than $20k. If you need a reminder to build up your savings, here it is.)
As stressful as it is when this happens, it feels so much better when you have a plan in place and are taking action, so I’m sharing my process below.
(This is where I remind you that I’m a marketer, not a lawyer. When in doubt, consult a lawyer.)
Before we even get into what to do or say, though, let’s talk mindset. If you think you’re a freelancer…no you’re not. You’re a business owner. Making that shift was honestly a game-changer for my business - among other things, I no longer felt bad about following up on late payments. (Yes, you read that right - I used to feel bad for asking to be paid for my work in a timely manner.)
So, as a business owner, here’s how I handle late payments:
👋 Phase 1: Follow Up
Reach out to your day-to-day contact, let them know that payment is late (they may not even be aware) and ask if they can help move it forward. So often, a payment is late because accounting missed the invoice, someone forgot to approve it, or your due date doesn’t align with a check run.
If that’s not the case, keep following up with both your day-to-day contact and your accounting contact. Do this via email so that you’re creating a record of your attempts to get paid, as well as any responses from your client.
Depending on your relationship with the client (and more importantly, what you want that relationship to look like going forward), you can also reference any late fees outlined in your contract when you follow up. You can offer to waive those fees if payment is received by a specific date, or you can offer a payment plan option, but you certainly don’t have to.