What to Do if Someone Refuses to Pay You (+Email Templates)

At some point in your freelancing career, you're bound to come across a bad client. And while poor communicators and complainers can be exhausting to handle, there's nothing worse than dealing with clients who refuse to pay.

Dealing with clients who act like paying you for your work is optional can feel like entering a minefield. No matter how many times a client is late on payments or flat out refuses to acknowledge your invoice, the situation is equally infuriating.

And while outstanding invoices hurt your business, so does resorting to extreme measures right off the bat. Acting on impulse can irreparably damage your relationship with the client, not to mention your reputation. So what can you do to get a client to pay you what you're owed while staying professional at the same time?

1. Send a payment reminder

Not every unpaid invoice is a sign of a customer refusing to pay for work done. If a client has missed a payment, the first step you should always take is giving them the benefit of the doubt in the form of an overdue payment reminder.

Losing track of invoices, vacations, and personal issues are just some of the reasons why a client might be late on an invoice. If the late payment is simply a matter of coincidence, a gentle reminder should be enough to get forgetful clients to pay.

That said, there are some clients who will want to avoid paying you by trying to get you to give up. If you find yourself in this situation, persistence is key.

As frustrating as it may be, sometimes showing a client you won't go away without getting paid is all it takes. And while chasing payments is nobody's idea of fun, being prepared for this scenario can save you a lot of headaches in the future.

Put an overdue payment plan in place

The longer you wait to follow up on an overdue payment, the harder it will be to get what you're owed. That's why having a plan of action and sticking to it is crucial. If you still don't have one, feel free to use the payment reminder email templates below.

Email template 1: Invoice one week overdue

Subject line: Overdue Payment Reminder - Invoice [Invoice Number]

Dear [Name],

According to our records, your payment for invoice [Invoice Number] in the amount of [Amount Owed] due on [Invoice Due Date] has not been settled yet.

We have attached a copy of the invoice for your convenience. If there are any outstanding issues or reasons for non-payment, feel free to reach out by calling us at [Phone Number] or replying to this email.

Thank you in advance, 

[Name]

Email template 2: Invoice two weeks overdue

Subject line: Overdue Payment Reminder - Invoice [Invoice Number] - Second Inquiry

Dear [Name],

According to our records, your payment for invoice [Invoice Number] in the amount of [Amount Owed] due on [Invoice Due Date] is now two weeks overdue.

Since we are not aware of any outstanding issues or reasons for non-payment, we ask you to make the payment as soon as possible. We've attached a copy of the invoice for your reference.

Kind regards, 

[Name]

Email template 3: Invoice three weeks overdue

Subject line: Overdue Payment Reminder - Invoice [Invoice Number] - Third Inquiry

Dear [Name],

We've made several attempts to reach you regarding payment for your outstanding invoice [Invoice Number] in the amount of [Amount Owed] due on [Invoice Due Date]. The payment is now three weeks past due.

Since we are not aware of any outstanding issues or reasons for non-payment, we ask you to make the payment as soon as possible to avoid late fees for payments made 30 days past due as stated in our payment terms. We've attached a copy of the invoice for your reference.

Kind regards, 

[Name]

Email template 4: Invoice 30 days overdue

Subject line: URGENT: Overdue Payment - Invoice [Invoice Number] - Final Notice

Dear [Name],

Your immediate attention is required to resolve this issue. 

We still haven't received payment for invoice [Invoice Number] in the amount of [Amount Owed] due on [Invoice Due Date].

Seeing that the invoice is now 30 days past due, a [Number] % late fee has been added as per our payment terms. You can find the updated invoice attached.

Please confirm receipt of the invoice and make the payment at your earliest convenience. If we do not receive payment in [Number] working days, we will need to resolve this matter via [a collection agency / court].

Kind regards, 

[Name]

2. Offer a compromise

With most non-paying clients, one or two reminders will be enough for you to at least find out the reasons behind missed payments. In cases when the client isn't flat out ignoring you, it's best to establish a clear line of communication to clarify the situation.

For example, some clients refuse to pay before all the work has been completed to their satisfaction. Whether they feel the work was substandard or they had different expectations, trying to reach a compromise might be less complicated than pursuing legal action.

When a client refuses to pay because of work quality 

If a client refuses to pay because your work did not meet their expectations, you can either offer a discount or invest more time into the project. Whichever option you choose, this is a great opportunity for you to reevaluate your project proposals. 

Consider whether the client's expectations are reasonable, but still don't match up with the final result you provided. If that's the case, the easiest way to prevent the same problem from happening again is to improve your proposals.

When a client refuses to pay because of financial problems

Sometimes, a client might not be able to make the full payment because of their own cash flow issues. In this case, the solution is simple: figure out a payment plan. Offering your client to make a monthly partial payment might get you paid faster than waiting for them to be able to pay the full amount in one go.

3. Hire a debt collection agency

When you've exhausted all other options or your client refuses to pay for no good reason, it's time to escalate the situation. One way of doing that is getting a debt collection agency to chase the payment on your behalf so you can free up your time (and headspace) for other projects. 

That said, collection agencies do take a certain percentage of the recovered amount as compensation for their services. Whether or not this course of action is the best for you will largely depend on the amount of money your client owes you.

4. Go to small claims court

If the thought of hiring debt collectors makes you uneasy, another way to escalate the situation is to take legal action against a non-paying client. To take a client to small claims court, you'll need to file a complaint and prepare your case, so make sure to document everything. That said, the amount of money you're suing for needs to be worth all the time and work that goes into a lawsuit (usually at least $2000).

5. Extreme cases, extreme measures

When you're dealing with a disrespectful client who outright refuses to pay you after you've done the work for no reason other than not wanting pay, you've found yourself in an extreme situation. Since the client has already ruined the relationship beyond repair, you don't want to do any future work for them anyways. 

What you do want is to avoid taking legal action and employing collection agencies, but still get paid. And depending on the work you do, resorting to extreme measures might do the trick and resolve those unpaid invoices.

For example, if you're a virtual assistant, you can pause any ongoing services until overdue payments are settled. A web designer might resort to taking down a website or withhold any digital assets until there are no more late payments. And if you've signed a retainer agreement, you can always terminate it if the client relationship sours. However, make sure that your terms clearly state no refunds will be made.

How to prevent payment issues in the future

No matter how strictly you demand payment, giving up will sometimes be your only option. The fact of the matter is, sometimes collecting the payment in full will be more trouble than it's worth. 

Unfair, yes - but that's the reality of being a business owner. That said, there are things you can do today to minimize the risk of clients refusing to pay in the future.

1. Set clear expectations

Make sure your project proposals are unambiguous and clearly state the results of the work, timelines, and responsibilities. This not only ensures your client understands the scope, but also protects you from objections down the line.

2. Always have a contract

A contract is a binding agreement between you and a client. And while most contracts will never need to be enforced in court, having one brings an extra layer of obligation and security for both you and your client.

Make sure to include payment terms, define the scope of work, specify termination conditions, and state your preferred dispute resolution method. And remember - if a client refuses to sign a contract, that's a red flag.

3. Charge late fees

As a freelancer, you are allowed to charge late fees on overdue invoices. However, before you do, make sure to check your state's legislation for the maximum amount allowed.

4. Collect a down payment

No matter the size of the project you're taking on, the best way to get paid is to actually get paid. Depending on your industry, you could ask for 50% at the start of the project and the other 50% once the work is done. Alternatively, if you offer ongoing services, you might want to charge a flat fee with add-ons.

That said, keep in mind that pricing is all about perception, and the client's perception depends on your presentation. For this reason, the percentage of your down payment will also depend on the total price of the project. 

The higher the total, the more intimidating the 50% upfront seems. So, for highly priced projects, you might want to break down the payments into smaller chunks. For instance, you could take 25% upfront, 50% at the halfway mark, and the rest on project completion.

5. Collect payment upfront

If you're wondering why a client would pay for something they haven't seen the results of in advance, the answer is simple: a discount. Offering your clients a 10-15% discount if they pay upfront is a win-win situation. Your client gets to take advantage of a deal, and you don't have to worry about getting paid down the line.

That said, whether or not a client chooses to pay for something sight unseen largely depends on the level of trust you established. This is why it's important to nail your proposal presentation and demonstrate expertise before you've won the project.

Final thoughts

Sometimes when a client misses payments, a friendly reminder won't be enough. And if your follow up emails and phone calls fall on deaf ears, you'll need to escalate the situation. That said, it's important to estimate whether the money you're owed is worth all the stress. At the end of the day, it's sometimes better to simply walk away, learn from the experience, and turn your focus to new clients.