Dealing with the professional non-payer
July 28, 2020
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July 28, 2020
The ‘professional non-payer’ is an unfortunate truth in the world of trade, and it’s crippling for small businesses.
The scenario goes a little something like this:
A tradesperson agrees to carry out some work for a client. They go in and complete the job with no issues raised. The tradesperson sends over an invoice, but instead of being paid, they’re given a list of reasons as to why the client is unhappy with the result. They refuse to pay and the payment falls into dispute.
For small businesses who rely on being paid on time and have to budget their cash flow, the consequences of a professional non-payer can be devastating.
However, not all is lost. There are several steps you can take to protect yourself and limit the likelihood of a spurious complaint.
Prevention is better than cure. Instead of falling into messy disputes or legal proceedings, do some research on any potential client so you know who you’re dealing with. Google and LinkedIn are excellent tools for gauging the kind of people or business they are, so see if they’ve made complaints about other businesses before or had any complaints made about them in the past. If they have, consider whether the issues raised sound fair or whether the complaints seem unwarranted.
This step isn’t always possible, and turning down clients seems counter-intuitive when you’re running a business. However, considering the potential harm they cause in the long-run, it might be better to weigh up your options before you agree to a job.
Contracts are useful. They protect you from pricey legal disputes and also deter professional non-payers from submitting a false claim. Be sure to have the following in place before you undertake any work:
To maintain your cash flow, building in payment terms such as deposits or an upfront fee, e.g., half in advance and half on completion is beneficial. It also means that if disputes do arise, your cash flow doesn’t take a significant hit.
Before and after photos are not only great for your portfolio, they protect you from any false claims made about the quality or finish of the work you’ve completed.
Be sure to take a range of both detail-orientated and wide-angled photographs. This builds a complete picture of the finished results and helps your credibility if things take a turn for the worst and you end up in court.
Whenever you finish a job, maintain good practice by asking your clients if they’re happy with your work. Be sure to ask them whether they’d like anything checking or refining. By stressing how their satisfaction is important to you and you’re more than happy to fix or resolve any issues, you limit the likelihood of a complaint. We have a Checkatrade Standard that helps shape engagement with customers that limits or reduces bad experiences with non-payers. Use it as a checklist before you start any work and try to embody its principles. That way, you’ve started your client relationship on the best possible footing.
Even so, a ‘professional’ non-payer is less likely to admit to being dissatisfied, which is why – for your own peace of mind if nothing else – it’s good to check and note their comments with a time and date. We also have a complaints article consumers can refer to if they’re unhappy with your work or think you’ve broken the rules. It’s there to protect both you and the customer, so familiarizing yourself with its contents might save you a headache further down the line.
Your time is money. We get it. And not being paid for the effort you’ve put in is infuriating. However, it’s easy to get frustrated and lose your high ground if you don’t approach a non-payer with caution. Avoid making any accusations yourself and remain as calm as possible in your dealings with them. This not only sets you apart as a professional, but it also discredits those who are attempting to undermine you.
In the first instance, send a chase email for any non-payment. Remind them of your late payment terms and see what they come back with. If the invoice is disputed, then follow up to ask for further clarification on what the non-payer is specifically unhappy with. Request photos of the work they’re disputing so you can see them for yourself, then check for discrepancies by comparing them with your own before and after pictures.
Once you’re aware of everything the non-payer believes withholding your payment warrants, take some time before you reply with your disagreement or counterclaim. Polite but firm correspondence is recommended. State your terms clearly and outline some potential resolutions, such as fixing a mistake or checking a fault. If that fails, it’s time to consider going down the legal route.
Sometimes, no matter how hard we try not to let them, situations escalate and we end up having to take further action to recover what’s owed. This is when it might be time to contact a solicitor or take the non-payer to a small claims court.
A final demand letter might be all that’s needed to secure a settlement. There are various template letters online that help you do this yourself, or you can save yourself the headache of figuring out collections and payment law and hire a professional.
For the more stubborn or professional of non-payers, be sure to provide robust evidence to guarantee a positive outcome.
Remember: Don’t let the fear of losing out on a client stop you from setting boundaries when it comes to being paid or treated fairly.
Like what you see? We have more where this came from. Check out our blog for more helpful information around managing difficult clients.
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The ‘professional non-payer’ is an unfortunate truth in the world of trade, and it’s crippling for small businesses. The scenario goes a little something like this: A tradesperson agrees to carry out some work for a client. They go in and complete the job with no issues raised. The tradesperson sends over an invoice, but...Continue reading