First, it is important to recognize that their is an expected rate of non-paying clients in any business.  The importance is to keep the number of clients who do not pay your invoices to a minimum.  A knee jerk reaction may be for you to contact an attorney to get your money in the door, but suing your clients is not exactly good PR nor the first thing that should be done to collect your money.  Remember, you will likely lose that client once you hire an attorney.

Before contacting an attorney consider these steps.  Please comment below if you have other ideas on how to collect:

1. Make sure you ask for the money. Avoiding conflict will cost you.  Do not be afraid of asking.
2. Use a third party such as an assistant or other employee to make these follow up calls to ask for the money.
3. If they do not want to pay after you ask, understand–why? See if you can address their concern.
4. If they plan on paying you, ask when, then follow up.  This may make you a bill collector, but a couple follow ups should be exhausted before escalation.
5. If they can not pay all of it, ask for partial payment now and the rest later.
6. If they still refuse, consider sending a formal demand letter. See “The most effective debt collecting email I ever wrote” by Andy Clarke.
7. If all else fails, consider consulting an attorney.  Some people do not take debts seriously until an attorney gets involved.  If they feel fine not paying you, your business is not the only one they owe money.  An attorney is not necessarily going to advise you to dive into litigation. The attorney may make it as simple as corresponding directly with the client or a tickler demand letter.  Last step is to file a suit.  Depending on the facts of the case, some attorneys may be willing to take on these cases under contingency.

There are other ways to avoid this issue in the first place:

1. Create a billing system. Invoice regularly so that your clients have accurate expectations.  If an invoice goes late, have a system in following up and sending late notices.  Think about your mortgage.  You know when your mortgage statements comes every month.  This is done on purpose.
2. Do not take on clients that can not pay.  Sometimes, clients that can not pay your fees will end up costing you money.
3. If you are providing a service, break up your services into milestones or parts.
4. If legal and marketable, collect money in advance.