Contractor Challenges: Customers Who Can’t or Won’t Pay

Written by | Field Service

Clients who won’t pay their bills can force your contracting company into bankruptcy. Don’t let that happen. Thanks to all the contractors in the past who refused to sit down and be cheated, we now know some great ways to get even the stingiest clients to pay their bill. Some may be easier than you expect.

Selling the debt to collectors or going to court are options, but you know they’re poor ones. You’re not even going to get half of your money back that way. Try these, before you settle for that…

Be Choosy with Your Clients

Hindsight is 20/20, right? One bad client is bad luck, but If you’ve got a habit for bad clients, your standards are the first thing you need to change. Nothing else is going to help until that’s done. Here are some ways you can attract a better class of clients-

  • Assess Your Marketing: Does your marketing target the people you want to target?
  • Keep Everything on the Level: The more “under-the-table” concessions a client insists on, the more likely they are to apply that same moral flexibility to paying you.
  • Ask Around: Others might have worked with your client, you’d be surprised how much you can learn just by word-of-mouth.

Get Those Contracts Iron-Clad

Yes, more hindsight. We promise this is the last one. Lawyers can be costly but it’s worth it when it’s the clients word vs. yours. Every single contract you use on the job should be reviewed by a licensed lawyer. Remember that a contract can help you even before you have to go to court. Even the most stubborn clients can open up to talking it out when they know they don’t have a case.

While you’re looking at the integrity of your documents, make sure you’re also keeping the paper trail for every job as complete as possible. You should be able to provide copies of every message your client has sent you if you intend to defend yourself.

Be Accommodating

Yes, the client is in the wrong—but do you want to be right or do you want your money? Easing up and offering solutions that are agreeable to both people is the quickest way to get things done. There are plenty of clients who aren’t paying because they overestimated their ability to afford the contracting work. These clients may still be happy to pay in full if they had an option that matched their needs.

Here are some other ways you can be accommodating to your clients:

  • Expand Your Payment Options: Try increasing the ways your customers can pay you.
  • Allow Installment Plans: This can be frustrating to your budget, but not as much as “no money”.
  • Be Ready to Accept Payment in the Field:

Become the Point of Contact

Don’t pass off the job to an assistant or secretary if you’re making a lot of calls about missing payments to one client. Instead, call them yourself. Identify yourself as the owner of the business and respectfully tell them you want to discuss the payment.

Many human cruelties come from a refusal to perceive our opponents as flesh-and-blood people with feelings and needs. Those walls fall apart when we’re directly confronted by the people we’re hurting. Keep these conversations calm, and you’ll see results.

Last modified: November 23, 2016

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