A Guide To Dealing With Difficult Clients – That won’t Pay!
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No matter what you do for a living, there is always one thing you can count on. Difficult clients plague everyone from time to time, and they never get any easier to deal with. With that in mind we hope our guide To Dealing With Difficult Clients – That won’t Pay, helps you make some changes in your business process. Do any of these issues with clients and invoicing sound familiar to you?:
- Asking for much more than originally agreed but insisting the price stays the same.
- Discounting because they don’t agree with what they have received.
- Constantly refusing to pay your invoices on time. Or at all!
- Saying the invoice never arrived, they haven’t seen it!
- Promising payment that never arrives.
It can be difficult to stay in control of the situation and ensure you don’t end up out of pocket. At a recent 10-12 Business Club meeting this was our the topic of our brainstorming session. We came up with a few ways to keep your cool and deal with difficult clients.
Get Payment Up Front
A lot of the difficulties, we discussed as business owners tended to revolve around customers not paying their bills on time, if at all. Cash flow is a really important thing to all business owners, but even more so to smaller companies or sole traders. Getting invoices paid on time is crucial to your success as a small business!
If you have dealt with a client previously who has missed payment dates, the easiest way to avoid the same issue happening again is to get full payment up front. If your client makes an issue of it, simply explain that due to the issues you experienced last time you worked together, up-front payment is required to ensure payment is received, and no work will be done until this is paid.
You can of course do this with new customers who you believe will be an issue, or instigate it as a general policy if this happens a lot. If you’re not comfortable with asking for so much up front, you could split the difference. Many companies operate on a payment basis of 50% with a confirmed order and balance due on completion or delivery, which helps you and the client with cash flow.
Make sure you have sent your invoice on time and that the client has received it. This can be the biggest delay for any small business in receiving payment for work agreed.
Start Using Service Agreements
‘Scope creep’ can happen during any project, but it tends to happen most in the creative industries, or any area where something is being built.
The client will give you an initial brief, but as you go along they start adding things until the workload is actually twice the amount you quoted for. The client of course then expects all of this extra work to be done at the quoted cost, because it’s ‘all in the same project’.
To avoid this, service agreements will become your best friend. When you get the brief for the project, put it into a basic contract and have your client sign it before work commences. You can also include a pricing structure for extra work on top of the agreed brief, based on timescale, volume, whatever you want really. Always include your payment terms and what will happen if they fail to meet them. Summarise the potential costs of non-payment and state that you will take legal action.
You can use the same basic document for every client and simply substitute the brief in each time. By doing this you have it in writing (and signed) exactly what the quote you gave covers, so any extra work can be charged accordingly. Scope creep has become significantly less of a problem for us since we started doing this!
Develop A Thick Skin
Sometimes no matter what happens, clients can get angry. They might be frustrated that something can’t be done in the time frame, that you won’t do extra work or that you’ve said no to their unreasonable request. Whatever the reason, angry clients can get pretty nasty sometimes.
To be successful in business you need to develop a pretty thick skin to deal with unsatisfied or annoyed people, no matter what they throw at you. Try to remember not to take anything they say personally, and let it roll off you like water off a duck’s back. If you struggle with this, a support network like one of our networking group of ladies is the perfect way to get things off your chest and let people help you, reassure you and get you back on your feet.
Don’t Be Afraid To Say No!
One thing we are all terrible at is saying no to work. When you’re first starting out you never say no to anything, taking on any work you can just to get by. As you grow and establish yourself as a business you can afford to be more selective about the clients you take on (though many of us aren’t).
This is an important step, as many of us get an idea of the ‘red flags’ for a difficult client. If you think a prospect will become a difficult client, don’t be afraid to say no! It’s better to spend time searching for a client who will be good to work with and worth what you charge than to accept a client who will be much more work for you. Sometimes, no price is high enough and you just need to walk away. And that’s OK!
Of course there’s lots of advice out there about dealing with difficult clients, search out some excellent blogs online. If you like what you have read then we have plenty more business topics to choose from.
This is the sort of issue we discuss in our meetings, allowing members to air their concerns and business problems and get advice on how to deal with them in a supportive and confidential setting. If you’re interested in visiting one of our groups, click here to book your place. We can’t wait to see you!