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Breaking the Code of Silence on Clients Who Don’t Pay

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An obvious part of any company is the process of payment. You do work or deliver a product and you receive funds for that payment. But what do you do when this business process breaks down, especially when you’re in a small business? Today’s guest post from Lorraine Ball discusses this question with frankness and sincerity.

Among small owners there is an unwritten code of silence. It is an unofficial “don’t ask don’t tell policy” when it comes to clients who don’t pay their bills. As small business owners ourselves, we identify with the trials and tribulations of other small business owners. We don’t want to embarrass our customers or create an uncomfortable situation in a small community.

As a result of our code of silence, there are companies who are able to take advantage of us. This is especially true for small marketing companies and freelance writers and designers.

Now I am not talking about companies who hit a snag, and may have to slow pay, or make partial payments. As a business owner, if a client talks to me, I will work with them to develop a reasonable payment schedule. (I have one client who has paid me $100/month for two years.)

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© Flickr user Miguel Pires da Rosa

I am talking about people who know when they sit down to begin a project they don’t have the money to pay the bill for the services they are requesting. They use services and string you along with promises to pay until you cut them off. Then they move on to the next unsuspecting company. They depend on the code of silence.

Indianapolis is a small community, and as a community we have to end the code of silence. We have to start telling each other about the clients who don’t pay their bills. I have a customer did not pay me for five months. Despite numerous promises, phone conversations and emails, when I went to my mailbox, no check appeared.

I finally put a note on his Facebook page. It was subtle, suggesting I was concerned about the health of their business since they weren’t returning my calls. I did finally get paid, but not without quite a bit of drama. So here’s my question, am I wrong to want to publish their name here so other small businesses don’t experience the same fate? I would love to hear your opinion.

Lorraine Ball is President of Roundpeg, a full service marketing firm in Indianapolis’ small business community. Visit them online at www.roundpeg.biz.

Lorraine brings up a tricky point. On the one hand, it never feels right to call people out in a public fashion, but on the other hand, if it’s the only way you get paid, then sometimes your livelihood may depend on it. You also don’t want to see your colleagues or friends go through a similar situation with a company that you would avoid at all costs. Depending on what your industry is, one tip we have would be to get paid as the work is completed. Don’t do 100% of the work with no payment, even with clients you trust. Do 20% of the work, and then get paid for the equivalent amount, or maybe ask for some money up front. Again, this may not work for every situation, but it’s a good idea that can help you avoid potentially unpleasant situations.

Running into situations like this frequently? We can help! Contact the business improvement consultants at AccelaWork today. We’ve seen all sorts of  problems and we are here to help you maximize your time and potential.

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