Pretoria web designer, ImagimediaAs a small business owner / freelancer / self employed person collecting money for work done can be a challenge. Some people are just not good at paying their bills and some really don't care. I have learned that people are less likely to pay in December and will catch up in January.

This article is not about those that go on holiday with your money, but the scaly ones that just don't pay their bills, the ones that will use every trick in the book to make you work free.

I have had on average of two bad clients every year that I have been in business for myself, around 10% of my clients have tried to stiff me in one way or another. The worse the economy the more this happens.

As a small business owner I hate having to beg for money that I have earned. I have learned over the years that getting the money is only marginally less important than getting the sale in the first place.

The stories here all true, I lost on some but on very few. I play for keeps. If a client is not wanting to pay, I stop doing business with them. My friend Hazel calls bad payers shop lifters.

You don't want shoplifters in your business, they are bad for the bottom line. I have used every one of the techniques in this blog to collect money over the years.

I am serious about business, am in it to make an income and the one thing you absolutely need to control is cash flow. The important thing about cashflow, is that you don't get it by cutting costs, you get it by finishing jobs and getting paid.

Absolutely none of that occurs if you are not doing sales. If someone screws you over and none of these techniques work, move on make another sale, get another deposit, deliver another job.
11 ways to collect money  from deadbeat clients in Pretoria

11 ways to collect money from deadbeat clients in Pretoria

2019-03-22 13:55:51

Collecting money from deadbeat clientsIf you walk into a shop and take goods without paying you are a thief, not a customer, If you employ someone to do a job for you and don't pay them the principle does not change.

Bad customers are bad for business and there must be no second chance. If you have a customer that is continuously tardy with payment, step up and tell them to stop being full of shit. You need to take control.

Customers will treat you the way you allow them to. No worse and no better. It is up to you to train them to treat you correctly. If someone does not pay you and you let it lag for 30 days, and then beg, that will be the way you will be dealt with in perpetuity. You get to say no.

Tell the client to go to your competition

Your client chose you because they knew you do a great job, they did this after checking out multiple suppliers, Very few customers choose the first supplier, yours was no different. You are doing a great job right?

Train your customers to pay on time

I want to tell you about Kirill. I built a website for Kirill and did a whole lot of SEO, and was continuously improving his results. When you searched for a Mozambican resort the website was always at the top of the list, but I was having trouble getting money out of Kirill.

One day I walked in with about 6 business cards and threw them on his desk. I told him he needed to pick one and transfer his website, just the content, that was his, the code was mine. He asked why? I said: "Kirill, I am tired of begging you to pay."

He pulled his chequebook out and said, how much do I owe you? I told him, He wrote the cheque. I then told him, I'd carry on but when I sent an invoice I expected payment. I was not going to beg for that which I had earned. He agreed. I never waited for my money again.

Sadly the relationship came to an end when Kirill left the company and the new manager had a mate that built web sites. Ponta Malongane no longer dominates the SERPs, not even when you search for them by name.

Never wait longer than 14 days to send a reminder

If someone hasn't paid you within a fortnight, you have a problem on your hands. If you don't send a reminder, they are going to ignore you for even longer. If it gets to 90 days you are going to be writing it off.

A reminder is a phone call, not an email. Ask why haven't I been paid? What can I do to resolve the problem. It's still time to be nice at 14 days, it must be an oversight, did you not get the invoice?

Sometimes people will open an email, get distracted and move on to something else. The phone call will be enough to refocus their attention where you want it. You will also immediately know if this is going to be a problem.

Never wait longer than two days to repeat your reminder

If someone promised payment on Monday and it's not there by Wednesday, pick up the phone. Listen to the excuse and make a decision about what to do next. If a promise is made, follow up with a request for a proof of payment on the day it was promised.

Don't let them off the hook. Be understanding, maybe they are waiting for someone else to pay them, it happens, but be firm. With bigger companies that don't have cash flow issues or shouldn't it's time for some emotional blackmail.

My dogs don't have food, I spent the budget getting your job done

Tell them you are a small business and rely on timeous payment to pay the bond, the electricity bill and buy the kids school shoes, Them making you wait is seriously undermining your cash flow and ability to offer them great service.

My kids are not going to get fed tonight, My dog food is finished and I am down to just less than what dog food costs. I have a problem, please help. I haven't been able to do any other work because I have been working on your job.

This is a killer technique and only on rare occasions has this technique not led to immediate payment, I have had clients that I told this too for 3 months in a row.

If you have an untrainable client, send them to your competition

I will not beg for money I have earned and if I have a customer that forces me too, I will fire them. I will suggest they try the company that is the biggest pain in my butt. The one that I am always fighting for business.

20% of your clients will give you 80% of your headaches, send them to your opposition. Your opposition will be working so hard trying to please your bad customers they will become less of a problem, and you will be able to give more attention to the 20% that give you the most money.

My limit is about two months before I drop business cards on their desk. When I drop business cards on their desk, it's an opportunity for them to change their ways, If they don't I just stop returning phone calls. I did give them a heads up after all.

If someone has not paid you, don't deliver more stuff

I watched someone lose his business because someone else was losing theirs. If they can't pay for the stuff you have already delivered, they won't be able to pay for the new stuff.

A friend was in deep to a customer, he hadn't been paid for two months, his client's account was at 90 days, he habitually paid at 60 days, The customer need another 100k worth of materials to finish the job and get paid. The friend delivered and lost R 500k right then.

The customer never completed the job, never got paid and never paid my friend. The business was liquidated, my friend got 5c in the rand, and the customer was still seen driving his 4x4 around town trading under a new business name and all his suppliers lost big.

Lets talk about when to get impatient and nasty.

Sooner rather than later is my motto, you have got to 30 days and the excuses are flowing thick and heavy. It's time to bring out the big guns. Going to court will not bear much fruit. I have won cases and still not collected, My friend won and got 5% of his money, it wasn't enough to pay the advocates.

If the following methods bring no results, write it off and walk away, consider it school fees. Paying lawyers tends to be throwing good money after bad unless you know that there are sufficient assets that can be attached. Also consider who else your creditor owes.

Collect the goods

If they won't pay you because they are not happy, collect the goods and take them back to fix them. A friend with a sign writing company removed signage from a business and said they would return it on payment.

It went to court and the sign writer told the magistrate that he had removed the signage to fix the problems, The customer refused to tell him what was wrong, so he was unable to fix it. The client was made to pay and extra for re-installation.

I have removed built in cupboard doors to fix and on one occasion 6 doors. Once I got paid the other time, I didn't but I had the doors.

Do debt collection at 3am

There is nobody that will not answer a phone at 3 am, They don't even look to see who is calling, If someone is phoning at 3 am, your mind goes worst case scenario. A good morning I have not received payment yet will upset them, a promise to phone at that time of the morning again and again has gotten some good results, but on land lines only sadly. Cell phones that allow call blocking have limited this ones effectiveness.

But a phone ringing at 3 am twice a week is an annoyance most will want to stop.

The Debt Collector or shaming them

Go to your nearest sign writer and get them to make up a couple of magnetic signs that say DEBT COLLECTOR in big letters, Then park your car on the street right outside the defaulting persons home, where it can be seen by all the neighbours, also make an A frame that says collecting from "" and the street number. Put it on the roof with an arrow pointing at the house. Stand around with a clipboard at the gate. It shouldn't take more than an hour. Add the protest as well. Do this when all his neighbours are getting home from work.

The Protest

You cannot have more than 4 people in a protest without needing permission, but 4 people is enough. Make cardboard signs that say, My Boss can't pay me because "so and so" won't pay him. If you don't have staff pick up some protestors on the side of the road. They will happily stand around shaming your client.

I did some work for Total SA. I got tired of the lack of payment and excuses. I took my three staff, parked them in front of reception and walked into the accountants office. I told him what was happening and the press were on the way, I had my cheque in less than 2 hours after waiting nearly 3 months.

Move in

I arrived with a sleeping bag, a flask and take aways and told the corporate drone that I was doing a sit in, I was there until I got my cheque. I started setting up in the reception, was invited to visit the accountant, who previously would not take my calls, and had the proof of payment in 20 minutes.

The best solution is not to get into a situation where you can get screwed over

Set up a contract, make payment terms clear, include penalties for non payment. If a payment is due and unpaid stop all work immediately.

Only supply services where you are in control. If I do a website for someone, I host it because I have code that won't give to third party hosts. this is non negotiable. If I do SEO I have access to the server so that I can make changes. If I don't have control, I don't work.

People who won't allow control and don't trust you, are the ones that can't be trusted. Never start work without a deposit. Never continue doing anything, not one line of code, not putting in one screw and most definitely no deliveries if a payment deadline has not been met.

You are in business to make a profit and doing stuff for free, is not going to allow you to do that.

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