• Finance

What to do if the check never arrives

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Anyone who offers a product or a service without being paid the full amount upfront is providing credit. Managed properly, credit is a good thing. But it also has a well-known downside: non-payment. The techniques used to deal with non-payment are generally known as “credit management.”

If you follow the tips below, you’ll be an awesome credit manager and you’ll be able to avoid most non-payment situations. When non-payment happens (and it happens to the best of us) your credit management techniques discussed here will help get you paid. Consistency is key: no matter how much you want to think your clients are a going to pay you need to consistently apply the techniques below to prevent non-payment.

The first step in protecting yourself against nonpayment is to ensure that you have a rock-solid contract. Find a contract template here as well as a comprehensive list of must-have contract terms and why you need to include them in your agreements.

What if the Check Never Arrives?

Even if your contract contains the provisions above, non-payment happens. If you’ve been able to get the clauses above into your contract, you’re in good shape to go to sue for your fees and win. Indepayment makes that process as seamless as possible.

**That being said, you really don’t want to go to Court. You want your client to pay. **

Here is what do when the check does not come before you come to Indepayment or a similar service. If you really dread making these calls, you can pay a service to do this for you. Have a look around, but here is one that Indepayment works with on occasion.

If you do it yourself, we recommend these steps (this is borrowed from a piece I wrote for Domino and the original can be found here):

**1. If the invoice isn’t paid upon the due date (whether that’s Net 30 or upon receipt), make a call to the client the next day, reminding them to pay the invoice. **

Leave a message or talk to someone. During the call, set a date for payment. Figure out who is responsible for getting the invoice paid. This may take some leg work but it’s worth it.

Do not make your payment contingent on someone else paying or some other outside factor. If the client won’t commit or gives you excuses, be polite but firm.

**2. Immediately after the call, write a short email confirming the date that was set for payment (“you will remit payment by _______”), or recapping the dispute (“you claim that you can’t make payment because X”). **

If they levy a charge at you, deny it. Do not concede any mistakes in writing. Your email should be SHORT. It should conclude by saying “if you disagree with anything in this email, please tell me.”

If you’re dealing with a client who is disputing the work and you have the above termination clause in your contract, you should cite to the contract and tell them that they failed to abide by the termination clause. Be careful about how you deal with the dispute. Try to get paid but conclude every correspondence with a line to the effect of:

“this correspondence is an attempt to settle the dispute and is written without prejudice to my rights to sue under the terms of the agreement between us or common law remedies which are explicitly reserved.”

Without something like that, any concessions you make in the correspondence may make it harder to collect. You’re likely going to need to go to a third party like Indepayment to deal with this one because they’ve already told you their not paying.

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3. If you agreed to wait for your payment, about 5 days before the payment is due call again to remind the client that payment is due and confirm that the payment is being processed.

Don’t worry about being a nuisance.

**4. If payment isn’t received by the date set or the client makes it clear they won’t pay, then send a formal demand letter by U.S. mail, preferably certified. **

There are collection letter templates online — here’s an example.

**5. If no payment is forthcoming after the demand letter is sent, then you need to bring out the big guns. **

Companies like Indepayment are one option — we have professionals who try to collect, as well as debt collectors and lawyers we work with if the client is being exceptionally difficult. Indepayment does no cost lawsuits, so you won’t have to pay any costs of the lawsuit.

6. If you don’t want to use a service like Indepayment, another option is to find a lawyer or engage a debt collector directly.

The lawyers who do this type of work are called “commercial collection” lawyers. Jump on Google and search for one in your area. You can also bring a claim in the small claims court yourself. Indepayment has a guide to doing that here.

Jesse Strauss is a lawyer and the founder of, the leading debt collection service for freelancers and independent workers.