What to Do If a Client Isn’t Paying (And How to Reduce the Risk Next Time)
- Jackie Atchison
- 3 days ago
- 3 min read
Intro
The work’s done. The invoice is overdue. You’ve followed up—politely, then firmly—but the client still hasn’t paid. Now what?
This post outlines practical steps to take when a client isn’t paying, and how to tighten your contracts and processes to reduce the risk next time.
Why It Matters
Unpaid invoices aren’t just annoying—they’re a cash flow risk. And if your contracts are vague, your follow-ups inconsistent, or your terms unenforceable, you may have less leverage than you think.
No one likes to start a job assuming an invoice won’t be paid—but a few simple steps up front can prevent disputes and reduce the cost of follow-up later. That includes:
Making it clear that deliverables won’t be handed over until specific payments are made
Breaking payments into instalments, which are easier for clients to manage and can flag issues earlier
Setting clear terms about what happens if payment is late or withheld
Having a plan in place—and the right terms upfront—can make all the difference.
What You Need to Know
Step 1: Check Your Agreement
Start by reviewing:
What payment terms were agreed
Whether the client was sent the invoice in the correct format
Any clauses about late fees, interest, or collection costs
What you’ve already communicated and when
If there’s no signed agreement or the scope was vague, it may be harder to recover payment—so your next steps need to be strategic.
Step 2: Follow Up in Writing
Send a clear, professional reminder:
Refer to the specific invoice and due date
Attach a copy of the invoice
Ask for confirmation that it’s been received and when payment will be made
Keep a record of all communication
If that doesn't work, escalate with a firmer message referring to your payment terms and outlining next steps (e.g. pausing further work or referring to collections).
| Tip: Avoid email chains with open-ended reminders. Be specific, consistent, and document everything.
Step 3: Decide on Next Steps
If the amount is significant or the relationship has broken down, you may need to:
Engage a lawyer to send a formal letter of demand
Instruct a debt recovery agency
Commence legal action (for example, under the small claims process if applicable)
Get advice before threatening legal action—it can help clarify your position and options.
Consider Any Rights You May Have Over Deliverables or Goods
In some cases, you may be entitled to retain deliverables or exercise a lien over goods or materials that haven’t yet been handed over. This depends on:
Whether your contract gives you that right
The nature of the work and how far it’s progressed
You may also be able to register a security interest on the Personal Property Securities Register (PPSR) to protect your position if you’ve supplied goods on credit or with retention of title.
PPSR rights must be clearly outlined in your contract and registered properly—ideally before delivering the goods.
| Worth Knowing: If you supply goods or retain ownership until paid, registering on the PPSR can give you priority over other creditors if the client becomes insolvent.
Commercial Insight
The best defence is a clear, enforceable contract. If you regularly deal with scope creep, late payers, or vague client expectations, your contract might need to do more of the heavy lifting.
That includes:
Clear milestones and payment triggers
Late fees or interest for overdue amounts
The right to suspend work or terminate if invoices remain unpaid
Clarity around what happens to deliverables if payment isn’t made
PPSR or lien provisions that can be enforced if necessary
What to Do Next if a Client Isn't Paying
Document your scope, pricing, and payment terms clearly upfront
Include a payment clause that gives you options if invoices aren’t paid
Use systems that let you send, track, and follow up invoices efficiently
Don’t wait too long—older debts are harder to recover
Closing Wrap
I help business owners put agreements and processes in place that support faster, more reliable payments—and give them a path forward when things go wrong. If you’re dealing with a non-paying client or want to reduce the risk of it happening again, I can help.
