If you run your own business it’s likely that at some point you’re going to come across a client who doesn’t pay you on time. So what do you do when it comes to chasing payment from them? Here are some suggestions on how to work with five types of late-paying clients when it comes to getting your outstanding invoices paid.

Chronic late payers
The chronic late payer will always pay up eventually, but not before those unpaid invoices have drained away your healthy cash flow. By keeping an eye on your aged debtor reports, you can identify clients who frequently pay late. You can cut down on the time you take to chase chronic late payers by using automatic invoice reminders.

Don’t forget to review these types of late paying clients to help others.

Clients that always forget your payment details
If you have a client that always seems to misplace your bank details when it’s time to pay, double-check that you’re always including your bank details on your invoices. Or, you could try offering a more immediate option by allowing your client to pay you online – in FreeAgent, you can add a payment link to your invoice email using services like GoCardless or PayPal. Your client can then just choose to pay you online via their bank account or credit card.

Clients that can’t afford to pay just yet
Any business can go through unforeseen difficulties, so if a client hasn’t paid yet it may not mean that they’re not planning to pay at all – they could just be facing short-term cash flow problems. Even if you think the client won’t pay, it’s worth having the awkward conversation and picking up the phone to ask when they plan to pay you. If it is just a short-term issue with a good client, you could maintain a positive relationship with them by offering an extension rather than enforcing late charges.

Clients that can’t afford to pay for longer
A client who needs a few extra weeks to pay up is relatively manageable, but what about those who need much longer? For example, a client may have a big deal fall through and have dozens of other pressing bills to pay before they can get to yours. In these cases, demanding immediate payment or issuing late fees is unlikely to be effective, as they simply can’t afford to pay you in full yet. Instead, consider arranging some kind of payment plan with these clients, where they pay in instalments. That way, your cash flow won’t be as badly affected as it could have been.

Clients that go AWOL
There’s nothing worse than having a client who just disappears without a trace. You try to contact them to pay but they won’t return your emails or calls and you just can’t get hold of them. For these clients – some of whom probably had no intention of paying you in the first place – you’ll have to make a choice. You could hire a professional collection agency, or for smaller debts, pursue your client through the small claims court (both of which could be time-consuming and end up costing you money). Or you can cut your losses and write off the invoice, before putting that client on your blacklist.

The key thing to remember is always to perform some level of due diligence on any new client, a simple search on their historical financial data and previous supplier reviews could help you to avoid being paid late