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3 Reasons for Late Payments and How to Avoid Them

Most late payments usually fall into one of the following 3 categories:

The sprawling company customer. We sometimes fall foul to long-winded bureaucratic processes that delay our payments. To mitigate this, try and pin your contact down on a company’s pay cycle and time your invoices to get paid as soon as possible. Be aware a lot of companies will purchase from you as soon as one cycle has ended to maximize their cash flow leverage. For example I see a lot of agency buying going on at the start of a month when they know invoices are sent month end.

The disorganised customer. Sometime a customer genuinely mislays your invoice. Be ready to send it out again and use your discretion to negotiate a new payment deadline if applicable.

The skint or hard-up customer. Your gut feeling around how a customer makes you feel should help you run a mile from these customers who have no business whatsoever asking you to do any work at all. They usually haggle a lot or ask for far too many concessions making you feel like you are in a lose-win negotiating situation. Resist the temptation to sell and avoid these customers at all costs.

Now here are three best practices to get paid on time:

Template Reminder

Dear Client,

This is a reminder that your account balance of XXXEuros remains outstanding. Enclosed is a statement of account for your reference.

Please arrange payment of this account at your earliest convenience. Your prompt attention to this matter would be greatly appreciated.

If payment has recently been made, please accept my thanks and ignore this reminder.


Flexible payment options. Be flexible over how you are paid especially if you work in multiple currencies. A good option is Wise (formerly TransferWise) or PayPal. Remember to account for a 4-5% commission being deducted from your transfer.

As a last resort use a small claims court for 3-5k debt collection. If diplomacy has failed and you have still not been paid for work fit for purpose don’t be afraid to threaten or actually go through with a small claim. Amounts vary from country to country but this is usually a robust to claim back 3-5k.

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