What To Do When Clients Don’t Pay

In Chronicles of a CEO by Rebecca Liston

There are a lot of controversial issues in the world of business, and the question of what to do when clients don’t pay you is, believe it or not, extremely controversial.

Unless you run a bank. Because then it is simple: you foreclose on the mortgage. Or repossess the car. Or the fridge. Or anything else you want to take so you get what’s owed to you.

Or unless you run a big store. Because when people don’t pay, they just don’t get the product. That’s pretty simple.

And, come to think of it, if you run an airline, train, or bus service…yep, you get your money or people just don’t get to take their seat. Theatre? Same thing.

So, wait a minute, if it is so simple and straight-forward for all those types of businesses, then why isn’t it so simple and clear when you run a service-based company?

Why is it that there’s any ounce of ambiguity around “if” you get paid?

What is that “if” all about?

Recently a friend of mine was asking how things were going. I was frustrated at that moment. I had just received a letter through my lawyer’s office to inform me that the client who owes me several thousand dollars for services rendered based on our legally-binding contractual agreement, simply does not feel she needs to pay me because times are “tough” for her right now.

My friend replied: “Oh well, if things are hard for her, then you should just let it go. It’s good karma.”

Ummm…is it? Is that really true?

Is it “good karma” to let someone use my services and just not pay? Is that valuing my SELF, and the service I provide? Or is that letting someone take advantage of me? It may be very true that times are “tough” for this former client, but why does she assume that times are not tough for ME? Why should I have to turn to my staff and say, “Hey, guess what? I cannot pay you this month because I don’t have the money. That client who owes us for that work we did just didn’t pay. So hey, sorry you can’t buy groceries. Sorry you can’t afford to park at the hospital to visit your mom. But times are really tough for that client.”Why is it “okay” for this client’s inability to honour her obligations to affect my finances, my life, and that of my team?

My friend was stumped at that.

See what I mean about this being a controversial issue?

If I take this woman to small claim’s court to get the money she owes to me for services rendered, I am judged by those who deem themselves “spiritual” for having no regard for “good karma.”

If I do not take this woman to court for the money she owes to me for services rendered, what message am I sending?

And why is this any different because I run a consulting company and not a bank?!?!

Why are the “rules” so slippery when it comes to providing service and anticipating that you’ll be paid for that service?

Why is it “okay” for people to say that times are tough for them, and not even give a moment of consideration to how their decision to not pay you may affect your financial picture?

At the end of the day, and after much deep consideration, I realized that the issue of clients not paying really doesn’t deserve to be controversial. Quite frankly, there is nothing to discuss. No argument to be made. Because it really is just the most simple thing ever.

You buy something, you pay for it. Period.

There is no room for emotional argument. No place for heated debate about karma and the “message” we are sending when we don’t “hold” people to their agreements (or if we do).

You buy something, you pay for it. The end.

Simple. Clear. Concise. Respectful. And integrous.

And if that isn’t “good karma,” then I don’t know what is.






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Rebecca Liston helps her clients predict, pivot, and compete in an increasingly complex global marketplace. Her clients quickly uncover the root of their challenges and know the actions to take to overcome them. A six-time nominee for the RBC Canadian Woman Entrepreneur Award, Rebecca combines business strategy with intuition, giving her clients the edge on forward-thinking, elegant answers to their most complicated problems. Her clients are entrepreneurs with CEO-mindsets and executives with entrepreneurial instincts. She is based in London, Ontario. What if you could get the answer to your biggest business challenge, in one sitting? Visit rebeccaliston.com to find out more.