What happens when clients don’t pay

I love clients. That is, clients who pay their bills. Admittedly, I once accidentally sent an invoice, even before the project started. Of course the client didn’t pay. I like to call this an exception. If the invoice is justified, then the client must pay. The full amount, on time.

In my years as an entrepreneur, I luckily had few clients who didn’t pay. Two times a client went bankrupt. I lost a few hundred euros. They lost their business, their house and everything they own. I feel sorry for them, and wish them well.

Grimmer, I will never forget a client who ordered a project, fully aware of the costs. And upon delivery, he simply did not pay. There were months of battle. We even went to court. But by then, his business was bankrupt. And so were we, almost. He started a new business as if nothing happened. It made me angry and sad, to have worked hard and with passion for him. In hindsight, he was nothing more than a thief. Not paying bills is a disgusting practice.

I have clients who do pay their bills, but always late. To me, this behavior is plain weird. I offer software as a service, on a subscription model, billed every single month. What reason could there be to stretch the 14 days payment term? Are you that strapped on cash? And if you’re doing that bad… you’re at the wrong address. I develop software, I am not a bank.

I have a client who actually negotiated a longer payment term. And he pays. Always. The full amount, on time. I love him. I like to emphasize negotiated. He asked for a longer payment term. He didn’t just take. Taking without asking is stealing, or at best, impolite.

When clients don’t pay, they need to be chased. I don’t like that. In the past I used to make phone calls and ask clients when they would pay. When it comes to excuses, companies can be as inventive as the average sixteen year old. Calls always end with some false promise. So I stopped calling. It’s not helpful, and it drains my energy.

Luckily, with a subscription model, there is a solution. For example, when I don’t pay my phone bill, the phone company disconnects me. I think that’s fair. So, I do the same. I disconnect clients who don’t pay their bill. In this way, they cannot use my software until they start paying again. I find it awful to disconnect clients, but at least the pain is shared.

Now, I have one client who doesn’t mind being disconnected. They don’t use the software, they don’t pay for it, and that’s exactly what they want. This seems clever, but to me, life doesn’t work that way. The monthly subscription fee is based on an agreed contract period. And that contract period must be served.

I feel that giving a client financial slack (e.g. letting them out of a contract or allowing longer payment terms) would be unfair. As self-serving as it may sound, this feeling of fairness is exactly the reason why I will not simply cancel a contract, and will to go to court. Especially when I see that other clients do make a effort to play by the agreed rules.


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